Griffin Mining Ltd

Published : April 09th, 2015

Preliminary Results

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Preliminary Results

Griffin Mining Limited ('Griffin' or the 'Company') has today published its preliminary results for the year ended 31st December 2014. Griffin and its subsidiaries (together the 'Group') recorded:

  • Revenues of $45,564,000 in 2014 (2013 $71,071,000);

  • Operating profit of $6,732,000 in 2014 (2013 $18,694,000);

  • Profit before tax of $1,021,000 in 2014 (2013 $13,228,000); and

  • Profit after tax of $190,000 in 2014 (2013 $8,157,000).

The financial results for 2014 were severely impacted by the suspension of processing activities at Caijiaying from 11th August to 17th November to facilitate the upgrade of the processing facilities and the subsequent ramp up on re-commissioning of those facilities. As a result, the amounts of ore processed and metals in concentrate produced and sold were significantly down on previous years.

With the use of lower grade ores during re-commissioning of the processing plant, the base and precious metal grades of the ore processed were slightly down on 2014 resulting in a minor fall in the recovery of base metals, whilst improvements were made in gold recoveries.

In summary, production in 2014 was as follows:

  • 747,775 tonnes of ore were mined, compared to 877,803 tonnes in 2013;

  • 572,390 tonnes of ore were processed, compared to 838,431 tonnes in 2013;

  • 25,901 tonnes of zinc metal in concentrate were produced, compared to 39,724 tonnes in 2013;

  • 7,623 ounces of gold in concentrate were produced, compared to 11,468 ounces in 2013;

  • 201,982 ounces of silver in concentrate were produced, compared to 323,808 ounces in 2013; and

  • 857 tonnes of lead in concentrate were produced, compared to 1,551 tonnes in 2013.

The average price per tonne of zinc metal in concentrate received by the Group in 2014 rose by 3.3% to $1,345 (2012 $1,302), for silver rose 1.8% to $17.1 per ounce (2013 $16.8), for gold by 1.5% to $1,251 per ounce (2013 $1,233), and for lead fell 2.3% to $1,595 per tonne (2013 $1,633).

Cost of sales fell to $25,345,000 (2013 $40,078,000) reflecting the suspension in processing and stockpiling of ore mined and hauled. With processing suspended and with mining and haulage impacted by restrictions in the supply of explosives and logistical issues created by the stockpiling of ore during the suspension in processing, unit cost of sales rose.

Group operating costs (including Caijiaying site) rose 9.6% in 2014 to $13,487,000 (2013 $12,299,000) with inflationary cost increases in China and non cash share option charges. This includes amounts due to Griffin's Chinese partners in the Hebei Hua Ao Joint Venture of $1,958,000 (2013 $1,599,000) which were previously treated as amounts due to non controlling interests.

Profits before tax declined to $1,021,000 (2013 $13,228,000) reflecting not just lower operating profits but losses on the disposal of plant and equipment scrapped as part of the plant upgrade of $1,835,000 and increased interest charges of $4,165,000 (2013 $3,651,000), arising from the lease of a new dry tailings facility at Caijiaying in 2013 and increased borrowings to facilitate the plant upgrade.

The Group benefited from interest receipts of $223,000 (2013 $145,000), foreign exchange losses of $39,000 (2013 gains $107,000), and other income of $105,000 (2013 $162,000).

Income taxes of $831,000 (2013 $5,071,000) have been charged. This includes a deferred taxation provision of $313,000 (2013 $297,000).

Basic and diluted earnings per share in 2014 was 0.11 cents (2013 4.63 cents).

During 2014, 50,000 (2013 260,000) ordinary shares were bought back in the market for cancellation at a cost of $30,000 (2013 $119,000). No shares were issued in 2014 (2013 3,900,000 ordinary shares were issued on the exercise of options) bringing the number of the Company shares in issue to 179,041,830 at 31st December 2014.

Net cash inflow from operating activities in 2014 amounted to $12,754,000 (2013 $24,561,000). $23,204,000 was invested in 2014, (2013 $7,347,000).

Attributable net assets per share at 31st December 2014 was 83 cents (2013 82 cents).

The directors have recommended that no dividend be declared at this time in view of the need for the use of the Company's financial resources for further investment in the Caijiaying Mine, repayment of bank loans and settlement of amounts due to non controlling interests.

Chairman's Statement:

Although the Company remained profitable for its 10th consecutive year, it will come as no surprise that the 2014 production and financial results were substantially below the previous year's almost solely due to the 3 month shutdown of the processing facilities at the Caijiaying Mine between the 11th of August and the 17th November to enable those facilities to be expanded from a 750,000 to a 1.5 million tonne per annum throughput. Furthermore, the recommissioning of the plant with low grade ore (so as not to risk higher grade ore on an untried circuit) in addition to continuing softness in all commodity prices, inevitably led to the lower results the Company achieved.

Such results are always heartbreaking and difficult to accept, but in this case they were forced upon the Company to ensure it could become a significant, mid-tier, base and precious metals producer. As stated, ad nauseam, in so many of my past missives, mining is substantially a fixed cost business where profitability rests almost exclusively on the rise and fall in commodity prices. As such, the benefits of the expansion undertaken should be felt most significantly by shareholders when the throughput has doubled and the zinc price cycle turns upwards. With the continuing fall in London Metal Exchange zinc stockpiles and the announced closure of 4 major zinc mines, in particular Century in the 3rd quarter of this year, the long predicted turn in the zinc price is hopefully not far away. The last 2 pieces of the upgrade jigsaw should also be completed in the same timeframe with the commissioning of the new, 750,000 tonne per annum ball mill and the completion of the construction and commissioning of the new upgraded power line in July.

As shareholders are well aware, the processing of the larger throughput remains contingent upon the granting of the new Mining Licence over Zone II and the area between Zones II and III. The Mining Licence process is now at the end of its second year and whilst it would be easy to become cynical and disheartened, I am neither. The process has not stalled, but continues unabated, if slowly, and I have every hope that it will be granted in this calendar year.

The year ahead should not only be seen as an increased production year with a hopefully rising zinc price. The exploration potential of Caijiaying is only now beginning to become apparent and the Company is firmly of the belief that the increase in underground drilling rigs from 2 to 5 with the consequential almost tripling of metres drilled will repay the expenditure spent. It is expected that a new mineral resource will be collated and released by the end of the year.

Although the expanding production profile and surrounding exploration of the Caijiaying Mine remains the primary focus of the Company, suitable acquisitions remain a priority. In the current, savagely depressed, junior mining market, only mining companies operating in the lowest cost quartile will survive severe downturns in commodity prices. Consequently, the Company continues to trawl for any low cost, base or precious metals mining projects that have the potential to be brought into long term, economic production for a capital cost that provides a substantial and justifiable return on equity to shareholders.

Of course, I am not unaware that many shareholders base the success of a mining company solely by its share price and the Company's offices frequently receive calls questioning the falling, stationary or slow rising share price. Unfortunately, most operating mining companies share prices have a direct correlation with the relevant commodity price with little interest in the underlying assets or prospects of the company concerned. Griffin's share price has historically been little different. However it should be noted that the Company has outperformed the FTSE Small Mining Index by 40.8% over the past 6 months and 85.4% over the past 12 months.

As often stated, Griffin, through Hebei Hua Ao, continues to assist and financially support the Caijiaying community. In March 2015, the final 183 of 400 cows were purchased and presented to the Caijiaying village for the dairy herd outlined in last year's report to successfully complete this new, long term industry which will provide a more sustainable annual income for villagers reliant on the seasonality of crops grown in the short summer months. In addition, all of the expatriate staff have volunteered their language abilities in their off-shift time to the regional school to teach English to the local school children.

2014 marked the 20th anniversary of Hebei Hua Ao. Close to a hundred junior and major mining companies have entered and subsequently left China. Hebei Hua Ao, the first foreign owned mining joint venture formed after China allowed foreign joint ventures in 1994, is the only mining joint venture that remains. It has been a momentous and outstanding achievement. It has succeeded because it has been operated on a legal, cultural and mutually respectful basis by a continuous group of dedicated and able visionaries. I would like to thank each and every one of those who have been involved and contributed to the success of the Caijaiying Mine and the Company. This multitude of people includes the past and present directors of both Hebei Hua Ao and Griffin, Chinese government officials at all levels, western operational management, consultants, Chinese managers, employees and contractors.

Griffin Mining Limited
Summarised Consolidated Income Statement
For the year ended 31 December 2014
(expressed in thousands US dollars)

2014

2013


Unaudited

Restated

$000

$000


Revenue

45,564

71,071


Cost of sales

(25,345)

(40,078)



Gross profit

20,219

30,993


Net operating expenses

(13,487)

(12,299)



Profit from operations

6,732

18,694


Losses on disposal of plant and equipment

(1,835)

-

Loss on disposal of interest in associated company

-

(2,229)

Foreign exchange (losses) / gains

(39)

107

Finance income

223

145

Finance costs

(4,165)

(3,651)

Other income

105

162



Profit before tax

1,021

13,228


Income tax expense

(831)

(5,071)



Profit after tax

190

8,157



Basic earnings per share (cents)

0.11

4.63


Diluted earnings per share (cents)

0.11

4.63

Griffin Mining Limited
Summarised Consolidated Statement of Comprehensive Income
For the year ended 31 December 2014
(expressed in thousands US dollars)

2014

2013


Unaudited

Restated

$000

$000


Profit for the year

190

8,157


Other comprehensive income that will be reclassified to profit or loss



Exchange differences on translating foreign operations

(281)

757


Other comprehensive income for the period, net of tax


(281)

757


Total comprehensive income for the period


(91)

8,914


Griffin Mining Limited
Summarised Consolidated Statement of Financial Position
As at 31 December 2014
(expressed in thousands US dollars)

2014

2013

2012


Unaudited

Restated

Restated

$000

$000

$000

ASSETS


Non-current assets


Property, plant and equipment

208,339

193,444

177,470

Intangible assets - Exploration interests

1,914

1,852

1,707

Investment in associated company

-

-

3,596

210,253

195,296

182,773

Current assets


Inventories

17,477

7,981

6,231

Receivables and other current assets

3,540

4,214

4,168

Cash and cash equivalents

23,371

26,278

16,764

44,388

38,473

27,163


Total assets

254,641

233,769

209,936


EQUITY AND LIABILITIES


Equity attributable to equity holders of the parent


Share capital

1,790

1,791

1,755

Share premium

71,310

71,339

70,037

Contributing surplus

3,690

3,690

3,690

Share based payments

3,064

2,748

3,055

Chinese statutory re-investment reserve

1,686

1,683

1,313

Other reserve on acquisition of non controlling interests

(29,365)

(29,346)

(29,346)

Foreign exchange reserve

10,957

11,212

10,485

Profit and loss reserve

84,794

84,614

76,797

Total equity attributable to equity holders of the parent

147,926

147,731

137,786


Non-current liabilities


Long-term provisions

2,582

2,591

2,535

Deferred taxation

1,953

1,646

1,316

Finance lease

10,720

12,012

-

15,255

16,249

3,851

Current liabilities


Taxation payable

-

2,878

3,840

Trade and other payables

26,563

17,219

17,347

Finance lease

1,161

487

-

Bank loans

63,736

49,205

47,112

Total current liabilities

91,460

69,789

68,299


Total equities and liabilities

254,641

233,769

209,936


Attributable net asset value per share to equity holders of parent

$0.83

$0.82

$0.79

Griffin Mining Limited
Summarised Consolidated Statement of Changes in Equity.
For the year ended 31 December 2014
expressed in thousands US dollars)

Share Capital

Share premium

Contributing surplus

Share Bassed 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 as previously stated

1,755

70,037

3,690

3,055

1,313

(29,346)

10,485

76,797

137,786

4,757

142,543

Prior year adjustment

-

-

-

-

-

-

-

-

-

(4,757)

(4,757

At 1st January 2013 restated

1,755

70,037

3,690

3,055

1,313

(29,346)

10,485

76,797

137,786

-

137,786

Regulatory transfer for future investment

-

-

-

-

340

-

-

(340)

-

-

-

Purchase of shares for cancellation

(3)

(116)

-

-

-

-

-

-

(119)

-

(119)

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)

Transaction with owners

36

1,302

-

(307)

340

-

-

(340)

1,031

-

1,031

Profit for the year

-

-

-

-

-

-

-

8,157

8,157

-

8,157

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

30

-

727

-

757

-

757

Total comprehensive income

-

-

-

-

30

-

727

8,157

8,914

-

8,914

At 31 December 2013 restated

1,791

71,339

3,690

2,748

1,683

(29,346)

11,212

84,614

147,731

-

147,731

Unaudited

Regulatory transfer for future investment

-

-

-

-

10

-

-

(10)

-

-

-

Purchase of shares for cancellation

(1)

(29)

-

-

-

-

-

-

(30)

-

(30)

Cost of share based payments

-

-

-

316

-

-

-

-

316

-

316

Transaction with owners

(1)

(29)

-

316

10

-

-

(10)

286

-

286

Profit for the year

-

-

-

-

-

-

-

190

190

-

190

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

(7)

(19)

(255)

-

(281)

-

(277)

Total comprehensive income

-

-

-

-

(7)

(19)

(255)

190

(91)

-

(91)

At 31 December 2014

1,790

71,310

3,690

3,064

1,686

(29,365)

10,957

84,794

147,926

-

147,926

Griffin Mining Limited
Summarised Cash Flow Statement
For the year ended 31 December 2014
(expressed in thousands US dollars)

2014

2013

Unaudited

Restated

$000

$000


Net cash flows from operating activities


Profit before taxation

1,021

8,157

Loss on disposal of interest in associated company

-

2,229

Foreign exchange losses / (gains)

39

(107)

Finance income

(223)

(145)

Finance costs

4,165

3,651

Adjustment in respect of share based payments

316

-

Depreciation, depletion and amortisation

6,211

7,184

Losses on disposal of equipment

1,835

Increase in inventories

(9,496)

(1,750)

Decrease in receivables and other current assets

1,256

563

Increase in trade and other payables

7,630

4,779


Net cash inflow from operating activities

12,754

24,561


Taxation paid

(2,271)

(5,692)


Cash flows from investing activities


Interest received

223

145

Payments to acquire - mineral interests

(6,041)

(4,883)

Payments to acquire - plant and equipment

(17,285)

(2,499)

Payments to acquire - office equipment

(11)

-

Payments to acquire intangible fixed assets - exploration interests

(90)

(110)

Net cash outflow from investing activities

(23,204)

(7,347)


Cash flows from financing activities


Issue of ordinary share capital on exercise of options

-

1,150

Purchase of shares for cancellation

(30)

(119)

Interest paid

(3,342)

(3,651)

Finance lease

(1,398)

(354)

Proceeds from bank loans

21,186

15,508

Repayment of bank loans

(6,655)

(13,415)

Net cash inflow / (outflow) from financing activities

9,761

(881)


(Decrease) / increase in cash and cash equivalents

(2,960)

10,641


Cash and cash equivalents at the beginning of the year

26,278

16,764

Effects of exchange rates

53

(1,127)

Cash and cash equivalents at the end of the year

23,371

26,278


Cash and cash equivalents comprise bank deposits.


Bank deposits

23,371

26,278

Included within net cash flows of $2,960,000 (2013 $10,641,000) are foreign exchange gains of $107,000 (2013 losses $904,000) which have been treated as realised.

Notes:

1. This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Company.

2. The summary accounts set out above do not constitute statutory accounts 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 31st December 2014 and the summarised consolidated income statement, summarised statement of comprehensive income, 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 unaudited 2014 statutory financial statements.

3. The annual report and accounts for 2014 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, 6th Floor, 60 St James's Street, London, SW1A 1LE.

4. 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.

Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:



2014



2013

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


190



175,066,140



0.11

8,157

176,015,707

4.63

Dilutive effect of securities






Options

-


-


-

-

-

-

Diluted earnings per share


190



175,066,140



0.11

8,157

176,015,707

4.63

5. The accounts have been drawn up and the 2013 accounts have been restated to include amounts due to Griffin's Chinese partners of $1,958,000 (2013 $1,599,000) in net operating costs rather than being attributable to non controlling interests in the Consolidated Income Statement, with the amounts due at 31st December 2014 of $4,966,000 (2013 $3,004,000) treated as other payables rather than as amounts due to non-controlling interests within equity within the Consolidated Statement of Financial Position. This relates back to the acquisition of Griffin's Chinese partner's equity interests in the Hebei Hua Ao Joint Venture in 2012 and a reappraisal of the arrangements with the Chinese partners. This indicates that the relationship with them is in the nature of a service provider facilitating Hebei Hua Ao's operations in China.

Read the rest of the article at www.noodls.com
Data and Statistics for these countries : China | All
Gold and Silver Prices for these countries : China | All

Griffin Mining Ltd

CODE : GFM.L
ISIN : BMG319201049
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Griffin is based in United kingdom.

Griffin is listed in United Kingdom. Its market capitalisation is GBX 25.2 billions as of today (US$ 30.0 billions, € 27.0 billions).

Its stock quote reached its lowest recent point on May 02, 2003 at GBX 10.07, and its highest recent level on September 19, 2024 at GBX 148.00.

Griffin has 169 993 727 shares outstanding.

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Annual reports of Griffin Mining Ltd
2006 Annual Report
Corporate news of Griffin Mining Ltd
7/14/2016Annual General Meeting
5/31/2016Annual General Meeting
5/29/2016Notice of Annual General Meeting
5/6/2016Director Dealings
5/3/2016Appointment of General Manager at The Caijiaying Mine
4/22/2016Annual Report and Accounts
4/14/2016Preliminary Results
1/22/2016Caijiaying Operations
1/14/2016Caijiaying Operations
1/11/2016Caijiaying Power and Safety Bureau Report
10/19/2015Caijiaying Operations
10/1/2015Special General Meeting
8/10/2015Grant of Options
8/4/2015Interim Statement for the six months ended 30th June 2015
7/15/2015Annual General Meeting
4/22/2015Holding(s) in company
4/17/2015Annual Report and Accounts
4/9/2015Preliminary Results
2/22/2015Transaction in Own shares
2/17/2015Directors Share dealings
2/12/2015Directors Share dealings
2/12/2015New Share Option Scheme
2/12/2015Directors Share dealings
2/12/2015Transaction in Own shares
2/12/2015Production and Licensing Update
1/28/2015Appointment of joint broker
11/17/2014Caijiaying expansion & commissioning of processing facilitie...
3/19/2014Appointment of Director
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