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)

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

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

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

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

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:

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.