TIDMGFM
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
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
Griffin Mining Limited
Condensed Consolidated Income Statement
(expressed in thousands US dollars)
6 months 6 months Year to
to to 31/12/2022
30/06/2023 30/06/2022 Audited
Unaudited Unaudited
$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 6 months Year to
to to 31/12/2022
30/06/2023 30/06/2022 Audited
Unaudited Unaudited
$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 re reserve on exchange and attributable
payments in investment acquisition reserve loss to equity
treasury reserve of reserve 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 6 months Year to
to to 31/12/2022
30/06/23 30/06/2022
$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 . 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
Weighted Per Weighted Per Weighted
average share average share average Per share
Earnings number amount Earnings number amount Earnings number amount
$000 of shares (cents) $000 of shares (cents) $000 of shares (cents)
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 5,188 188,266,386 2.76 3,034 187,843,776 1.62 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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END
IR SFFFLFEDSEFU
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