Griffin Mining Limited ('Griffin' or 'the Company') has today released its results for the six months ended 30th June 2016.

Highlights:

  • Revenues of $20.8 million (2015: $35.2 million)

  • Operating loss of $1.8 million (2015: profit $6.4 million)

  • Loss before tax of $4.1 million (2015: profit $3.7 million)

  • Loss after tax of $4.1 million (2015: Profit $2.2 million)

Financial and Trading:

Revenues and profits were severely impacted by the suspension of mining until 22nd January following a fatality at Griffin's Caijiaying mine in October 2015 and disruption caused by the Chinese new year holidays in February resulting in a lack of ore and low grade ore to process in the first quarter of 2016. Revenues were further impacted by relatively low commodity prices in the first quarter of 2016. The second quarter has seen an increase in the amount of ore mined and consequentially processed which together with rising commodity prices has led to a return to profitability.

With 13.5% less ore hauled to surface, throughput of 365,337 tonnes of ore in the six months to 30th June 2016 at the Caijiaying Mine was down 12.8% on that achieved of 418,950 tonnes in the six months to 30th June 2015. With surface stockpiles drawn down with lower grades, metal in concentrate production in the period was:

  • 13,420 tonnes of zinc (2015: 20,081 tonnes);

  • 705 tonnes of lead (2015: 962 tonnes);

  • 120,953 ounces of silver (2015: 193,098 ounces); and

  • 3,553 ounces of gold (2015: 6,274 ounces).

Zinc revenues before royalties and resource taxes in the six months to 30th June 2016 were $15,798,000 (2015 $26,288,000) with less zinc metal in concentrate sold and the average price received after smelter charges of $1,190 per tonne down 13% on that received in 2015 of $1,368. Lead and precious metals revenues were $6,372,000 (2015: $10,799,000) with less metal in concentrate sold.

Cost of sales in the six months to 30th June 2016 was down 16.4% on the same period in 2015 reflecting the suspension in mining and haulage and consequent reduction in throughput. Costs were further reduced by a 7.5% fall in the value of the Renminbi in the period compared to the same period in 2015.

With improved mining, haulage and processing rates in the second quarter, unit costs were down on the same period in 2015 with; costs per tonne of ore mined down 27.7%; costs per tonne of ore hauled down 20.3%; and costs per tonne of ore processed down 6.1%. With the fall in the value of the Renminbi and less expenditure on local community projects, operating (administration) costs were $5,454,000 down 34% from that incurred in the six months to 30th June 2015 of $8,124,000.

Profits before tax were impacted by: foreign exchange losses of $190,000 (2015: $24,000) arising from a weaker Renminbi against the US dollar in the period; interest payable on Chinese bank loans of $1,938,000 (2015: $2,480,000); finance lease interest of $307,000 (2015: $392,000); interest receivable of $80,000 (2015: $106,000); and other income of $81,000 (2015: $36,000).

In view of the losses incurred no provision for taxation has been made (2015: $1,442,000).

Basic and diluted losses per share were 2.29 cents (2015: earnings 1.24 cents). At 30th June 2016, attributable net assets per share amounted to 75 cents (2015: 82 cents).

Funds continue to be repatriated from China to cover central costs whilst leaving sufficient working capital within Hua Ao for the further development of the Caijiaying mine. During the period $5,620,000 was expended on mine development and plant upgrade work.

Administrative state issues in China outside the Company's control continue to delay the grant of a new mining licence over the unmined Zone III deeps, Zone II and adjacent areas at Caijiaying. Development of the mine at Zone III continues.

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, 'The interim results, although by their very nature disappointing, need to be understood in the context of the short and long term consequences of the 5 month shutdown caused by the death of a contractor at Caijiaying in late 2015. The cessation of operations not only ceased mining, processing, production, revenues and profits, but also prevented underground clean-up activities and vital capital development to be undertaken in the down period. The effects of the shutdown were being felt, both operationally and financially, until June of this year. Barring any further extraneous events, the second half of 2016 is expected to return to normality and, with higher commodity prices, the Company is confident of a very acceptable second half year period. Needless to say, the Company continues to progress the Mining Licence application and remains hopeful of a successful conclusion to this matter.'

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

6 months to

30/06/2016

Unaudited

6 months to

30/06/2015

Restated

Unaudited

Year to

31/12/2015

Audited

$000

$000

$000

Revenue

20,818

35,216

59,779

Cost of sales

(17,290)

(20,676)

(42,948)

Gross profit

3,528

14,540

16,831

Net operating expenses

(5,354)

(8,124)

(12,530)

(Loss) / profit from operations

(1,826)

6,416

4,301

Losses on disposal of equipment

-

-

(48)

Foreign exchange (losses)

(190)

(24)

(447)

Finance income

80

106

202

Finance costs

(2,245)

(2,872)

(5,084)

Other income

81

36

136

(Loss) / profit before tax

(4,100)

3,662

(940)

Income tax expense

-

(1,442)

(1,246)

(Loss) / profit after tax

(4,100)

2,220

(2,186)

Basic (loss) / earnings per share (cents)

(2.29)

1.24

(1.22)

Diluted (loss) / earnings per share (cents)

(2.29)

1.24

(1.22)

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

6 months to

30/06/2016

Unaudited

6 months to

30/06/2015

Unaudited

Year to

31/12/2015

Audited

$000

$000

$000

(Loss)/ profit for the financial period

(4,100)

2,220

(2,186)

Other comprehensive income

Exchange differences on translating foreign operations

(1,184)

10

(2,967)

Other comprehensive income for the period, net of tax

(1,184)

10

(2,967)

Total comprehensive income for the period

(5,284)

2,230

(5,153)

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

30/06/2016

30/06/2015

31/12/2015

Unaudited

Unaudited

Audited

$000

$000

$000

ASSETS

Non-current assets

Property, plant and equipment

209,388

213,186

210,252

Intangible assets - Exploration interests

1,843

1,946

1,870

211,231

215,132

212,122

Current assets

Inventories

4,718

16,797

7,182

Other current assets

4,062

3,293

3,194

Cash and cash equivalents

18,313

24,348

24,062

27,093

44,438

34,438

Total assets

238,324

259,570

246,560

EQUITY AND LIABILITIES

Equity attributable to equity holders of the parent

Share capital

1,790

1,790

1,790

Share premium

71,310

71,310

71,310

Contributing surplus

3,690

3,690

3,690

Share based payments

1,672

388

1,363

Shares held in treasury

(3,875)

(3,875)

(3,875)

Chinese statutory re-investment reserve

1,558

1,688

1,595

Other reserve on acquisition of non-controlling interests

(29,346)

(29,346)

(29,346)

Foreign exchange reserve

6,921

10,946

8,068

Profit and loss reserve

81,250

89,762

85,350

Total equity attributable to equity holders of the parent

134,970

146,353

139,945

Non-current liabilities

Long-term provisions

2,376

2,584

2,433

Deferred taxation

2,568

1,954

2,630

Finance lease

5,670

10,693

7,454

10,614

15,231

12,517

Current liabilities

Taxation payable

-

-

-

Trade and other payables

28,654

30,197

28,977

Finance lease

2,420

725

1,982

Bank loans

61,666

67,064

63,139

Total liabilities

92,740

97,986

94,098

Total equities and liabilities

238,324

259,570

246,560

Number of shares in issue

179,041,830

179,041,830

179,041,830

Attributable net asset value / total equity per share

$0.75

$0.82

$0.78

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

Sharecapital

Share premium

Contributing surplus

Share based

payments

Shares held in

treasury

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

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

At 31 December 2014

1,790

71,310

3,690

3,064

-

1,686

(29,365)

10,957

84,794

147,926

Cost of share based payments

-

-

-

72

-

-

-

-

72

Transfer on expiry of options

(2,748)

-

-

-

-

2,748

-

Purchase of shares for treasury

-

-

-

(3,875)

-

-

-

-

(3,875)

Transaction with owners

-

-

-

(2,676)

(3,875)

-

-

2,748

(3,803)

Retained profit for the 6 months

-

-

-

-

-

-

-

-

2,220

2,220

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

-

2

19

(11)

-

10

Total comprehensive income for the period

-

-

-

-

-

2

19

(11)

2,220

2,230

At 30June 2015 (unaudited)

1,790

71,310

3,690

388

(3,875)

1,688

(29,346)

10,946

89,762

146,353

Regulatory transfer for future investment

-

-

-

-

-

6

-

-

(6)

-

Cost of share based payments

-

-

-

975

-

-

-

-

-

975

Transaction with owners

-

-

-

975

-

6

-

-

(6)

975

Retained profit for the 6 months

-

-

-

-

-

-

-

-

(4,406)

(4,406)

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

-

(99)

-

(2,878)

-

(2,977)

Total comprehensive income for the period

-

-

-

-

-

(99)

-

(2,878)

(4,406)

(007,383)

At 31 December 2015

1,790

71,310

3,690

1,363

(3,875)

1,595

(29,346)

8,068

85,350

139,945

Cost of share based payments

-

-

-

309

-

-

-

-

-

309

Transaction with owners

-

-

-

309

-

-

-

-

-

309

Retained profit for the 6 months

-

-

-

-

-

-

-

-

(4,100)

(4,100)

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

-

(37)

-

(1,147)

-

(1,184)

Total comprehensive income for the period

-

-

-

-

-

(37)

-

(1,147)

(4,100)

(5,284)

At 30 June 2016

1,790

71,310

3,690

1,672

(3,875)

1,558

(29,346)

6,921

81,250

134,970

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

6 months to

30/06/2016

Unaudited

6 months to

30/06/2015

Restated

Unaudited

Year to

31/12/2015

Audited

$000

$000

$000

Net cash flows from operating activities

(Loss) / profit before taxation

(4,100)

3,662

(940)

Foreign exchange losses

190

24

447

Finance (income)

(80)

(106)

(202)

Finance costs

2,245

2,872

5,084

Adjustment in respect of share based payments

309

72

1,047

Depreciation, depletion and amortisation

3,510

3,823

6,808

Losses on disposal of equipment

-

-

48

Decrease / (increase) in inventories

2,464

680

10,295

(Increase)/ decrease in receivables and other current assets

(926)

29

804

(Decrease) / increase in trade and other payables

(326)

3,654

2,748

Net cash inflow from operating activities

3,286

14,710

26,139

Taxation paid

-

(1,223)

(974)

Cash flows from investing activities

Interest received

80

106

202

(Payments) to acquire / receipts from intangible fixed assets - exploration interests

(17)

(30)

(68)

Payments to acquire - mine development

(4,035)

(4,012)

(8,960)

Payments to acquire - plant & equipment

(1,585)

(4,547)

(7,218)

Net cash (outflow) from investing activities

(5,557)

(8,483)

(16,044)

Cash flows from financing activities

Purchase of shares for treasury

-

(3,875)

(3,875)

Interest paid

(1,938)

(2,480)

(4,324)

Finance lease

(1,469)

(866)

(2,573)

Proceeds from bank loans

-

3,328

3,171

Net cash (outflow) from financing activities

(3,407)

(3,893)

(7,601)

Increase / (decrease) in cash and cash equivalents

(5,678)

1,111

1,520

Cash and cash equivalents at beginning of the period

24,062

23,371

23,371

Effects of exchange rate changes

(71)

(134)

(829)

Cash and cash equivalents at end of the period

18,313

24,348

24,062

Cash and cash equivalents comprise bank deposits

Bank deposits

18,313

24,348

24,062

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 2015.
  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 2015 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 2015 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 2016, Hebei Hua Ao (a subsidiary of the Company) had bank loans outstanding of $61,666,000 (30th June 2015 $67,064,000). 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

30/06/2016

Unaudited

6 months to

30/06/2015

Unaudited

Year to

31/12/2015

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

(4,100)

179,041,830

(2.29)

2,220

179,041,830

1.24

(2,186)

179,041,830

(1.22)

Dilutive effect of securities

Options

-

-

-

-

-

-

-

-

-

Diluted earnings per share

(4,100)

179,041,830

(2.29)

2,220

179,041,830

1.24

(2,186)

179,041,830

(1.22)

Griffin Mining Limited published this content on 11 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 11 August 2016 06:07:06 UTC.

Original documenthttp://www.griffinmining.com/news/news-2016/429-interim-statement-for-the-six-months-ended-30th-june-2016

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