Griffin Mining Limited UNAUDITED INTERIM RESULTS

RNS Number : 8299D

Griffin Mining Limited

12 September 2024

 

           

 

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: [e-mail]

 

12^th September 2024

 

UNAUDITED INTERIM RESULTS

for the six months ended 30^th June 2024

 

 

Griffin Mining Limited ("Griffin" or the "Company") today releases its unaudited results for the six months ended 30th June 2024.

 

 

Highlights:

 

·    Revenues of $85.7 million (30^th June 2023: $69.5 million).

·    Gross Profit of $38.5 million (30^th June 2023: $21.7 million).

·    Operating profit of $19.7 million (30^th June 2023: $9.1 million).

·    Profits before tax, depreciation, and interest of $34.1 million (30^th June 2023: $23.9 million).

·    Profit before tax of $20.5 million (30^th June 2023 $9.6 million).

·    Profit after tax of $11.3 million (30^th June 2023: profit $5.2 million).

·    Basic earnings per share of 5.93 cents (30^th June 2023: 2.77 cents).

·    Cash inflow from operations $24.0 million (30^th June 2023 $21.4 million).

 

Financial and Trading:

 

Mining, haulage and processing rates of circa 1.5 million tonnes of ore per annum have been maintained in the first half of 2024 with 764,682 tonnes of ore mined and 736,010 tonnes of ore processed to produce:

 

-    26,202 tonnes of zinc ( 30^th June 2023 - 28,095 tonnes);

-    731 tonnes of lead (30^th June 2023 - 697 tonnes);

-    164,781 ounces of silver (30^th June 2023 - 151,608 ounces); and

-    11,307 ounces of gold (30^th June 2023 - 7,980 ounces).  

 

Whilst the average zinc ore grade declined from 3.98% in the first half of 2023 to 3.76% in the first half of 2024, the gold grade improved from 0.53g/t in the first half 2023 to 0.73g/t in the first half of 2024, enabling Griffin to benefit from higher gold prices. Likewise the silver grade increased from 14.0g/t in the first half of 2023 to 14.8g/t in the first half of 2024. Zinc recoveries were marginally down on that in the first half of 2023 whilst gold and silver recoveries improved on that in the first half of 2023.

 

During the six months to 30^th June 2024:

 

-    25,653 tonnes of zinc metal in concentrate were sold (30^th June 2023: 28,939 tonnes); 

-    11,257 ozs of gold in concentrate were sold (30^th June 2023: 7,835 ozs);

-    162,202 ozs of silver in concentrate were sold (30^th June 2023: 147,663 ozs); and

-    714 tonnes of lead in concentrate were sold (30^th June 2023 : 670 tonnes).

 

Turnover increased by 23.3% from $69,518,000 in the first half of 2023 to $85,746,000 in the first half of 2024, with Griffin benefiting from higher metal prices received and increased gold and silver in concentrate production.  Zinc revenues before royalties and resource taxes in the six months to 30^th June 2024 were $59,974,000 (30^th June 2023: $55,443,000).  Lead and precious metals revenues were $30,476,000 (30^th June 2023: $18,179,000).

 

Average metal prices received in the first half year were:

	30th June		30th June
	2024		2023
	$		$
Zinc per tonne	2,338		1,916
Gold per oz	2,183		1,851
Silver per oz	23.5		19.3
Lead per tonne	2,904		2,276

 

Costs of sales (mining, haulage and processing costs) decreased by 1% in the first half of 2024 from that in the first half of 2023, despite a 5.8% increase in ore mined and a marginal decrease in ore processed from that in the first six months of 2023. 

 

Administration costs, excluding the Chinese partners interests and share based incentive charges, increased by 37.0% from $9,999,000 in the first half of 2023  to $13,701,000 in the first half of 2024. This primarily reflects bonuses to personnel on achieving throughput of 1.5 million tonnes per annum.  A charge of $2,149,000 (30^th June 2023: $969,000) has been made in respect of the Company's share incentive scheme and $2,954,000 (30^th June 2023: $1,677,000) has been provided for the Chinese partners service fees based upon Hebei Hua Ao's profits.

 

Griffin benefited from an  increase in interest received from $565,000 in the first half of 2023 to $826,000 in the first half of 2024, reflecting a rise in bank deposits from $46,887,000 at 30^th June 2023 to $65,250,000 at 30^th June 2024, despite $11,656,000 expended on share buy backs in that period. Mine development and other capital expenditure of $10,628,000 was incurred in the first half of 2024 (30^th June 2023: $9,534,000) primarily on the ongoing development of the Zone II area at Caijiaying expected to bought into production in 2025.

 

The tax charge of $9,177,000 is disproportionally large compared with pre-tax profits of  $20,473,000 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.

 

 

Chairman's Statement

 

Chairman Mladen Ninkov commented, "In what's becoming a well worn cliché, this is yet another outstanding operational and financial performance by the Company and it's Caijiaying Mine. With Operating Profit up 116%, Profit Before Tax up 114% and Profit After Tax up 117% on the same 6 month period from last year, all with a balance sheet without any debt, I couldn't be prouder of the Company's management, employees, contractors and other stakeholders. My heartfelt thanks goes out to all of them."

 

 

 

 

Further information

 

Griffin Mining Limited

Mladen Ninkov - Chairman                                                                    Telephone: [phone]

Roger Goodwin - Finance Director

 

Panmure Liberum Limited - Nominated Adviser & Joint Broker                   Telephone: [phone]

             James Sinclair-Ford

             Kieron Hodgson

             Dougie McLeod

               

Berenberg - Joint Broker                                                                                 Telephone: [phone]

                Matthew Armitt

  Jennifer Lee

 

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 to 30/06/2024 Unaudited		6 months to 30/06/2023 Unaudited		Year to 31/12/2023 Audited
	$000		$000		$000
Revenue	85,746		69,518		146,023
Cost of sales	(47,288)		(47,779)		(94,181)
Gross profit	38,458		21,739		51,842
Administration expenses	(18,804)		(12,645)		(28,005)
Profit from operations	19,654		9,094		23,837
Losses on disposal of equipment	(82)		(63)		(784)
Foreign exchange (losses)	(40)		(25)		(136)
Finance income	826		565		1,394
Finance costs	(73)		(85)		(177)
Other income	188		126		352
Profit before tax	20,473		9,612		24,486
Income tax  expense	(9,177)		(4,424)		(9,250)
Profit for the period	11,296		5,188		15,236
Basic earnings per share (cents)	5.93		2.77		8.03
Diluted earnings per share (cents)	5.93		2.76		7.98

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

 

	6 months to 30/06/2024 Unaudited		6 months to 30/06/2023 Unaudited		Year to 31/12/2023 Audited
	$000		$000		$000
Profit for the financial period	11,296		5,188		15,236
Other comprehensive income / (expense) that will be reclassified to profit or loss
Exchange differences on translating foreign operations	422		(5,865)		(2,912)
Other comprehensive income / (expense) for the period, net of tax	422		(5,865)		(2,912)
Total comprehensive income / (losses) for the period	11,718		(677)		(12,324)

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

 

	30/06/2024		30/06/2023		31/12/2023
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	245,258		245,632		250,370
Intangible assets - exploration interests	600		532		575
Other non-current assets	1,471		1,613		1,554
	247,329		247,777		252,499
Current assets
Inventories	7,862		5,530		5,828
Receivables and other current assets	3,984		2,957		2,886
Cash and cash equivalents	65,250		46,887		60,007
	77,096		55,374		68,721
Total assets	324,425		303,151		321,220
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,845		1,928		1,928
Share premium	67,318		78,550		78,550
Contributing surplus	3,690		3,690		3,690
Share based payments	5,090		1,059		3,109
Shares held in treasury	(1,157)		(1,644)		(2,017)
Chinese statutory re-investment reserve	3,507		3,091		3,529
Other reserve on acquisition of non-controlling interests	(29,346)		(29,346)		(29,346)
Foreign exchange reserve	(3,036)		(6,375)		(3,480)
Profit and loss reserve	225,253		204,121		213,789
Total equity attributable to equity holders of the parent	273,164		255,074		269,752
Non-current liabilities
Other payables	3,087		9,134		3,106
Long-term provisions	3,961		2,594		3,929
Deferred taxation	-		1,160		-
Finance leases	519		628		570
	7,567		13,516		7,605
Current liabilities
Trade and other payables	36,530		32,048		38,308
Lease liabilities	158		167		169
Business taxation payable	7,006		2,346		5,386
Total current liabilities	43,694		34,561		43,863
Total equities and liabilities	324,425		303,151		321,220
Number of shares in issue	184,530,477		192,828,420		192,828,420
Attributable net asset value / total equity per share	$1.48		$1.32		$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 payments	held in treasury	re investment reserve	reserve on acquisition of non-controlling interests	exchange reserve	and loss reserve	attributable to equity holders of parent
	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
At 31st 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	9,216	-	-	-	-	-	-	-	9,317
Issue of shares under share incentive scheme	78	-	-	891	-	-	-	-	-	7,084
Regulatory transfer for future investment	-	-	-	-	-	207	-	-	(207)	-
Transaction with owners	179	9,216	-	891	-	207	-	-	(207)	16,401
Retained profit for the 6 months	-	-	-	-	-	-	-	-	5,188	5,188
Other comprehensive income:		67,318
Exchange differences on translating foreign operations	-	-	-	-	-	(108)	-	(5,757)	-	(5,865)
Total comprehensive income for the period	-	-	-	-	-	(108)	-	(5,757)	5,188	(677)
At 30th June 2023  (Unaudited)	1,928	78,550	3,690	1,059	(1,644)	3,091	(29,346)	(6,375)	204,121	255,074
Share based payments	-	-	-	2,050	-	-	-	-	-	2,050
Purchase of shares for treasury	-	-	-	-	(373)	-	-	-	-	(373)
Regulatory transfer for future investment	-	-	-	-	-	380	-	-	(380)	-
Transaction with owners	-	-	-	2,050	(373)	380	-	-	(380)	1,677
Retained profit for the 6 months	-	-	-	-	-	-	-	-	10,048	10,048
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	58	-	2,895	-	2,953
Total comprehensive income for the period	-	-	-	-	-	58	-	2,895	10,048	13,001
At 31st December 2023	1,928	78,550	3,690	3,109	(2.017)	3,529	(29,346)	(3,480)	213,789	269,752
Issue of shares on exercise of options	20	808	-	-	-	-	-	-	-	828
Transfer on exercise of options	-	-	-	(168)	-	-	-	-	168	-
Share based payments	-	-	-	2,149	-	-	-	-	-	2,148
Purchase of shares for treasury	-	-	-		(11,283)	-	-	-	-	(11,283)
Cancellation of shares	(103)	(12,040)	-		12,143	-	-	-	-	-
Transaction with owners	(83)	(11,232)	-	1,981	860	-	-	-	168	(8,306)
Retained profit for the 6 months	-	-	-	-	-	-	-	-	11,296	11,296
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(22)	-	444	-	422
Total comprehensive income for the period	-	-	-	-	-	(22)	-	444	11,296	11,718
At 30th June 2024  (Unaudited)	1,845	67,318	3,690	5,090	(1,157)	3,507	(29,346)	(3,036)	225,253	273,164

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

	6 months to 30/06/24		6 months to 30/06/2023		Year to 31/12/2023
	$000		$000		$000
Net cash flows from operating activities
Profit before taxation	20,473		9,612		24,486
Issue of shares under share incentive scheme	2,149		969		3,019
Foreign exchange losses	40		25		136
Finance income	(826)		(565)		(1,394)
Finance costs	73		84		177
Depreciation, depletion and amortisation	14,487		14,845		28,026
Losses on disposal of equipment	82		63		784
Decrease / (increase) in inventories	(2,033)		2,547		2,249
Decrease / (increase) in receivables and other assets	(1,098)		477		547
(Decrease) in trade and other payables	(1,778)		(385)		(415)
Taxation paid	(7,557)		(6,245)		(9,238)
Net cash inflow from operating activities	24,012		21,427		48,377
Cash flows from investing activities
Interest received	826		565		1,394
Proceeds / (costs) on disposal of equipment	8		168		(263)
Payments to acquire - mineral interests and mine development	(8,838)		(4,539)		(16,792)
Payments to acquire - property, plant & equipment	(1,790)		(4,995)		(6,056)
Payments to acquire - office lease, furniture and equipment	-		0		-
Payments to acquire - intangible assets - exploration interests	(25)		(125)		(168)
Net cash (outflow) from investing activities	(9,819)		(8,926)		(21,885)
Cash flows from financing activities
Issue of shares on exercise of options	828		-		-
Interest paid	-		(21)		(27)
Purchase of shares for treasury / cancellation	(11,283)		-		(373)
Bank loan advances	-		4,228		4,271
Repayment of bank loans	-		(4,228)		(4,271)
Lease repayments including interest	(80)		(78)		(155)
Net cash (outflow) from financing activities	(10,535)		(99)		(555)
Increase in cash and cash equivalents	3,658		12,402		25,937
Cash and cash equivalents at beginning of the period	60,007		34,138		34,138
Effects of exchange rate changes	1,585		347		(68)
Cash and cash equivalents at end of the period	65,250		46,887		60,007

 

 

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 2023.  

 

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 2023 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 2023 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. Whilst it is difficult to accurately predict future profitability and liquidity, particularly regarding the impact of metal prices, the directors consider that at current metal prices and with the benefit of existing cash resources and agreed banking facilities the Group can continue as a going concern for the foreseeable future without the need to curtail operations.and 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 30/06/2024 Unaudited			6 months to 30/06/2023 Unaudited				Year to 31/12/2023 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 (loss) / earnings per share
Earnings  attributable to ordinary shareholders	11,296	190,505,932	5.93	5,188	187,039,932	2.77	15,236		189,771,884	8.03
Dilutive effect of securities
Options	-	-	-	-	1,226,454	(0.1)	-		1,234,740	(0.05)
Diluted earnings per share	11,296	190,505,932	5.93	5,188	188,266,386	2.76	15,236		191,006,624	7.98

 

 

7.   As at 30^th June 2024 there were no adjusting post balance sheet events.

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