Caijiaying Project
INTRODUCTION
The Caijiaying Mine is an operating zinc, gold, silver, and lead mine, together with processing plant, camp and supporting facilities, located approximately 250 kilometres by road, north-west of Beijing in the Hebei Province of the PRC. The Caijiaying Mine is easily accessible by freeway from Beijing. The site has significant water supplies, two 35,000 volt power lines connected to the electricity grid, full connectivity to fixed and mobile telecommunications systems and broadband access for internet services. It is 63 kilometres from Chongli, the location of the outdoor events of the 2022 Winter Olympic and Paralympic Games, connected via a high speed train link with Beijing.
Griffin has held an interest in Hebei Hua Ao since 1997 having financed and managed the development of the Caijiaying Mine from initial exploration to the extraction and processing of the equivalent of 1.5 million tonnes of ore per annum to produce primarily zinc but also gold, silver, and lead in concentrate.

DEVELOPMENT
Griffin has held an interest in Hebei Hua Ao since 1997 having financed and managed the development of the Caijiaying Mine from initial exploration to the extraction and processing of the equivalent of 1.5 million tonnes of ore per annum to produce primarily zinc but also gold, silver, and lead in concentrate.
Griffin has invested over $380m on acquiring its interest in Caijiaying and in the development and construction of the mine and processing facilities, financed mainly from internally generated funds. The Caijiaying Mine was commissioned on time and on budget in 2005.
Numerous upgrades to the Caijiaying Mine have taken place since commissioning leading to the current name plate mill throughput capacity of 1.5 million tonnes of ore per annum.
Mining rates from the Zone III alone have recently reached the equivalent of 1.5 million tonnes of ore per annum. The development of the Zone II area at Caijiaying commenced in 2023, which will enable sustained production at these rates.
Exploration and resource definition work is ongoing at Caijiaying. There are eight known areas (zones) of mineralisation within Hebei Hua Ao’s tenement areas with Zone III currently being mined and development work expected to commence at Zone II in 2023 and in the area between Zones II and III. The latest JORC reported Mineral Resource Estimate for Caijiaying Zones II & III amended for mining depletion totals 88 million tonnes, representing a 45 plus year mine life at current extraction and throughput rates.
Griffin’s Chinese Joint Venture – Hebei Hua Ao
Hebei Hua Ao is a contractual co-operative joint venture company established under PRC law in 1994 with an operating term of 25 years on formation.
Griffin’s Chinese joint venture partner in Hebei Hua-Ao is the Zhangjiakou Yuanrun Enterprise Management Consulting Service Co. Ltd (formerly the Zhangjiakou Caijiaying Lead Zinc Mining Company) (“Yuanrun”), a partnership comprising the Zhangjiakou City Government and the Third Geological Brigade of Hebei Province.
Griffin maintains good relations with the Chinese authorities at township, county, provincial, and state levels, which has perhaps enabled Griffin to advance its Caijiaying project further than any other foreign controlled mining project in China.
Initially, Griffin held 60% of Hebei Hua Ao (through its wholly owned subsidiary China Zinc) with the remaining 40% held by Yuanrun.
In 2012 the operating term of Hebei Hua Ao was due to expire in 2019. In light of the continuing increase in the resources base and production profile of the Caijiaying Mine, the Company, through China Zinc, purchased an additional 28.8% interest in Hebei Hua Ao from Yuanrun in 2012. Griffin now holds an 88.8% equity interest in Hebei Hua Ao and Yuanrun retains an 11.2% residual interest, resulting in Hebei Hua Ao being in the nature of a wholly owned subsidiary of the Company.
In addition, and as part of the purchase agreement, the term of the Hebei Hua Ao joint venture was extended to October 2037.
In order to comply with the new PRC law on Chinese-Foreign Equity Joint Ventures, Hebei Hua Ao will be required to convert to a limited liability equity company with an indefinite life by 1 January 2025.
Hebei Anglo
In January 2004, a second contractual joint venture company, Hebei Anglo, was formed to hold the mineral rights to the area surrounding the original Hebei Hua Ao licence area and any other areas of interest in Hebei Province.
Griffin, through its wholly owned UK subsidiary Panda Resources Limited (“Panda”), has a 90% interest in Hebei Anglo whilst Yuanrun holds 10%. As Griffin investigates other areas of interest and projects in China, Hebei Anglo may be used to invest in any such projects.
The Company continues to aggressively explore, expand, and develop the Caijiaying Mine whilst also investigating potential acquisitions of mining projects that are capable, through either advanced exploration or mining expertise held within the company, of being brought into production to meet the Company’s criteria for economic returns to shareholders.
MINERAL RESOURCE ESTIMATE
Caijiaying Zone III Remaining Mineral Resources
Zone III Domain 1: Zn Resources > 1% Zn
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Measured | 18.6 | 4.5 | 0.2 | 23 | 0.6 | 833 | 42 | 13,511 | 363 |
Indicated | 13.1 | 4.0 | 0.2 | 18 | 0.5 | 528 | 22 | 7,493 | 211 |
Inferred | 14.1 | 3.5 | 0.2 | 22 | 0.4 | 495 | 28 | 9,978 | 173 |
Sub-Total | 45.7 | 4.1 | 0.2 | 21 | 0.5 | 1,856 | 92 | 30,982 | 747 |
Zone III Domain 2: Au Resources > 0.5 g/t Au
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Inferred | 0.6 | 0.8 | 0.1 | 19 | 2.8 | 5 | 1 | 386 | 57 |
Sub-Total | 0.6 | 0.8 | 0.1 | 19 | 2.8 | 5 | 1 | 386 | 57 |
Zone III: Total
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Measured | 18.6 | 4.5 | 0.2 | 23 | 0.6 | 833 | 42 | 13,511 | 363 |
Indicated | 13.1 | 4.0 | 0.2 | 18 | 0.5 | 528 | 22 | 7,493 | 211 |
Inferred | 14.7 | 3.4 | 0.2 | 22 | 0.5 | 500 | 29 | 10,364 | 230 |
Total | 46.3 | 4.0 | 0.2 | 21.1 | 0.5 | 1,861 | 92 | 31,368 | 804 |
Caijiaying Zone II Mineral Resources
Zone II Oxide: Zn Resources > 1% Zn
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Indicated | 1.2 | 2.9 | 0.5 | 19 | 0.3 | 35 | 6 | 751 | 11 |
Inferred | 1.6 | 2.5 | 0.5 | 17 | 0.1 | 39 | 8 | 830 | 7 |
Total | 2.8 | 2.7 | 0.5 | 18 | 0.2 | 74 | 14 | 1,581 | 17 |
Zone II Fresh: Zn Resources > 1% Zn
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Indicated | 11.5 | 3.8 | 0.9 | 27 | 0.3 | 436 | 109 | 10,085 | 96 |
Inferred | 26.4 | 3.7 | 1 | 30 | 0.4 | 977 | 253 | 25,108 | 350 |
Sub-Total | 37.9 | 3.7 | 1 | 29 | 0.4 | 1,413 | 362 | 35,193 | 446 |
Zone II Total
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Indicated | 12.7 | 3.7 | 0.9 | 27 | 0.3 | 471 | 115 | 10,836 | 107 |
Inferred | 27.9 | 3.6 | 1 | 29 | 0.4 | 1,015 | 261 | 25,938 | 356 |
Total | 40.7 | 3.7 | 0.9 | 28 | 0.4 | 1,486 | 376 | 36,774 | 463 |
Caijiaying Zone V Mineral Resources
Zone V Zn Resources > 1% Zn
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Inferred | 6 | 3.2 | 1.4 | 56 | 0.6 | 191 | 84 | 10,819 | 116 |
Total | 6 | 3.2 | 1.4 | 56 | 0.6 | 191 | 84 | 10,819 | 116 |
Caijiaying Zone VIII Mineral Resources
Zone VIII Domain 1: Zn Resources > 1% Zn
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Inferred | 6.1 | 4.4 | 0.7 | 36 | 0.5 | 272 | 41 | 7,112 | 106 |
Total | 6.1 | 4.4 | 0.7 | 36 | 0.5 | 272 | 41 | 7,112 | 106 |
Zone VIII Domain 2: Au Resources > 0.5 g/t Au
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Inferred | 0.7 | 0.7 | 0.7 | 45 | 2.4 | 5 | 5 | 1,012 | 54 |
Total | 0.7 | 0.7 | 0.7 | 45 | 2.4 | 5 | 5 | 1,012 | 54 |
Zone VIII Total
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Inferred | 6.8 | 4 | 0.7 | 37 | 0.7 | 277 | 46 | 8,124 | 160 |
Total | 6.8 | 4 | 0.7 | 37 | 0.7 | 277 | 46 | 8,124 | 160 |
Caijiaying Combined Global Mineral Resources February 2022
Tonnes | Zn | Pb | Ag | Au | Zn Metal | Pb Metal | Ag Metal | Au Metal | |
Category | (Mt) | (%) | (%) | (g/t) | (g/t) | (kt) | (kt) | (kOz) | (kOz) |
Measured | 18.6 | 4.5 | 0.2 | 23 | 0.6 | 833 | 42 | 13,511 | 363 |
Indicated | 25.8 | 3.9 | 0.5 | 22 | 0.4 | 999 | 137 | 18,329 | 318 |
Inferred | 55.4 | 3.6 | 0.8 | 31 | 0.5 | 1,983 | 420 | 55,245 | 862 |
Total | 99.7 | 3.8 | 0.6 | 27.2 | 0.5 | 3,815 | 598 | 87,085 | 1,543 |
Notes:
The Caijiaying Mineral Resources are based on resource modelling work completed by CSA Global Pty Ltd and reported in 2022 in accordance with JORC 2012 guidelines. The information in this report that relates to Mineral Resources is based on, and fairly reflects, information compiled by Dr. Maxim Seredkin a Competent Person, who is a Member of the Australian Institute of Geoscientists. Dr. Maxim Seredkin is a full-time employee of CSA Global Pty Ltd. Dr. Maxim Seredkin has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Dr. Maxim Seredkin consents to the disclosure of the information in this report of the matters based on his information in the form and context in which it appears.
The Caijiaying Mine’s Global Mineral Resource estimate comprises Zones II, III, V and VIII at a zinc cut-off grade of 1% as, amended for mining depletion at Zone III at 31 December 2022. In summary, the Global Measured, Indicated and Inferred Mineral Resource estimate totals 99.7 million tonnes at 3.8% Zn, 0.6% Pb, 27.2g/t Ag and 0.5g/t Au, resulting in total contained metal of approximately 3.82 million tonnes of zinc, 0.6 million tonnes of lead, 87.1 million ounces of silver and 1.54 million ounces of gold.
Zone III, which has been the primary source of ore since the Caijiaying Mine was commissioned in 2005, continues underground production down to the 1000RL (1,000 metres above mean sea level) mining licence boundary. In 2022 a total of 199 underground diamond drill holes were completed at Zones III and II for a total of 28,696 metres utilising 4 to 5 underground electric-hydraulic diamond drill rigs. Zones V and VIII are located within a Retention Licence that covers an area of 2.23 square kilometres and is valid until 16 July 2024. Applications for the conversion of the Retention Licence to a Mining Licence are in progress.
Zone III
The Mineral Resource estimate at Zone III has been amended for mining depletion up to 31 December 2022. The 2022 depleted Measured, Indicated and Inferred Zone III Mineral Resource estimate totals 46.3 million tonnes at 4.0% Zn, 0.2% Pb, 21.1g/t Ag and 0.5g/t Au, resulting in total contained metal of approximately 1.9 million tonnes of zinc, 0.1 million tonnes of lead, 31.4 million ounces of silver and 0.80 million ounces of gold. Underground diamond drilling has focused on grade control and resource definition drilling within the Zone III main mine corridor.
The Zone III Mineral Resource estimate is defined by a total of 189 surface diamond drillholes, 32 reverse circulation surface drillholes and 4,603 underground diamond drillholes with an average spacing of approximately 40 metres x 40 metres, for a combined total of 607,959 metres of drilling.
Zone II
Underground resource definition diamond drilling continued in Zone II throughout 2022 with periodic disruptions due to government imposed operational shutdowns and Covid-19 related impediments. The Indicated and Inferred Zone II Mineral Resource estimate first reported in January 2021 remains unchanged at 40.7 million tonnes at 3.7% Zn, 0.9% Pb, 28.0g/t Ag and 0.4g/t Au, resulting in total contained metal of approximately 1.5 million tonnes of zinc, 0.4 million tonnes of lead, 36.8 million ounces of silver and 0.46 million ounces of gold. This estimate was based on a total of 109 surface diamond drillholes, 91 reverse circulation surface drillholes and 163 underground diamond drillholes, to define the Zone II deposit at an average spacing of approximately 40 metres x 40 metres for a combined total of 91,383 metres of drilling.
An additional 70 underground diamond drill holes for a total of 16,126 metres were completed for Zone II in 2022.
Zone V
According to the conditions set forth in the Retention Licence, renewed in July 2022, there have been no on ground activities at Zones V and Zone VIII in 2022. As this phase of the licencing procedure involves pursuing administrative applications for a mining licence, the mineral resource at these sites remains unchanged. At Zone V the Inferred Mineral Resource Estimate totals 6.0 million tonnes at 3.2% Zn, 1.4% Pb, 56.0g/t Ag and 0.6g/t Au resulting in total contained metal of approximately 0.2 million tonnes of zinc, 0.08 million tonnes of lead, 10.8 million ounces of silver and 0.12 million ounces of gold. A total of 34 surface diamond drillholes, 3 reverse circulation surface drillholes with an average spacing of approximately 25 metres x 100 metres define the Zone V deposit for a combined total of 15,242 metres of historical drilling.
Zone VIII
The Inferred Mineral Resource estimate at Zone VIII totals 6.8 million tonnes at 4.0% Zn, 0.7% Pb, 37.0g/t Ag and 0.7g/t Au resulting in total contained metal of approximately 0.3 million tonnes of zinc, 0.05 million tonnes of lead, 8.1 million ounces of silver and 0.16 million ounces of gold. A total of 44 diamond drill holes with a spacing of 50 metres x 100 metres define the Zone VIII deposit for a combined total of 32,193 metres drilled.
GEOLOGY
The Caijiaying Mine is located at the northern margin of the North China Craton in the Yanshan Metallogenic Belt within Hebei Province of the PRC. This prolific metallogenic belt trends east-west for hundreds of kilometres and contains numerous large mineral deposits of various types making the Yanshan one of the most economic regions in northern China. The local geology at the Caijiaying Mine comprises of early Proterozoic granulite and gneiss with marble lenses, which is unconformably overlain by the late Jurassic Baiqi Formation and Zhangjiakou Formation. Porphyry sills and dykes intruding along faults have then cut across the sequence. Mineralisation is believed to be related to a Jurassic igneous event that altered the 2.3 billion-year-old metamorphic basement rocks.
The Caijiaying Mine hosts base metal and gold mineralisation consistent with that of a replacement skarn type deposit. Lithologies comprise a mixed sequence of amphibolite-grade metavolcanic and metasedimentary rocks intruded by three generations of Jurassic porphyry dikes and sills that crosscut the mineralisation. The mineralisation commonly occurs as sulphide lenses of sphalerite with lesser pyrite and minor galena that favourably replace calc silicate and iron enriched amphibolite units within the folded metamorphic volcanic basement rocks. The Caijiaying Mine orebodies of Zn-Au-Ag-Pb are up to 20 m thick, tend to dip steeply to moderately to the west, and extend along strike and down dip tens to hundreds of metres. Overall, the geology at the Caijiaying Mine is complex and the deposit is the result of a combination of volcanic activity, structural deformation and hydrothermal alteration.
EXPLORATION
Hebei Hua Ao Mining Area
Significant progress has been made at the Caijiaying Mine with the prioritization of underground diamond drilling towards grade control and near mine resource definition targets at Zones III and II. Numerous technical geological studies completed over the past years continue to provide practical exploration-based outcomes. In 2022 the exploration activity has been dominated by desktop data analysis and exploration target generation that is set to expand existing areas of mineralisation and unlock exploration potential in the Hebei Hua Ao Mining area.
Regional Exploration
The successful production and mine expansion at the Caijiaying Mine continues to be the core focus. While there has been no regional exploration activities the Company continues to research and assess appropriate project opportunities.
Ground magnetic field work at Sangongdi
Signing Ceremony with Third Geological Brigade
2023 Exploration
Technical structural lithogeochemical studies have been a significant component to the successful mine production at Zone III over many years. These research studies continue in 2023 with a focus on advanced geochemical and structural modelling techniques being applied at Zone II.
Underground exploration drilling activities for 2023 are set to increase and are summarised into the following categories:
- Zone II resource definition and exploration drilling of Induce Polarization (IP) geophysical anomalies east of the main line of lodes
- Zone II exploratory drilling west of the main line of lodes
- Zone III deep exploratory drilling below the 1000RL
- Regional project evaluations including administrative report compilations and tenure applications to the relevant PRC Government agencies.
OPERATIONS
2022 was one of the most disrupted and challenging years in the history of the Group with ongoing Covid-19 pandemic issues and 143 days of lost production due to restrictions imposed by the PRC authorities during the Winter and Paralympic Olympics and the Chinese Communist Party 20th National Congress. Despite the loss of 143 days’ production, the commercial benefits of higher production and sound cost management were realised financially in 2022.
Despite these extreme challenges, the persistence and resilience of the operational team delivered all required objectives to achieve an annualised 1.5 million tonnes of ore per annum production capability by the conclusion of 2022 with a record 136,000 tonnes of ore processed in December 2022.
The operational improvements to reach the capability of processing 1.5 million tonnes of ore per annum was the result of a culmination of a three-year mine capability project to improve mine safety, planning, mechanisation, and automation, including modernisation of contractor equipment and skills.
Sustained improvements throughout 2022 continued with a fully modernised fleet of trucks, Jumbos and production drills supported by optimised paste back fill systems resulting in a record 150,000 tonnes of ore blasted and 138,000 tonnes of ore hauled in December 2022.
Sustainable safe performance is the foundation of the Company’s commitment to our employees, contractors and stakeholders and developing a unique, beneficial relationship with all the communities, including the 80% of all employees who reside locally.
Mine safety improvements have been critical to supporting the push for higher production with the implementation of digital reporting systems and culturally appropriate safe production bonuses further aligning all workers and contractors to the Company operating objectives with safe production.
Griffin, through Hebei Hua Ao, seeks to support the local rural community by providing access to advanced training, education through scholarships, community support programs and stable employment with the benefit of giving Hebei Hua Ao ongoing access to employees of the requisite calibre.
Sustainable production for the foreseeable future is secure. Zone III, above the 1000RL, has all infrastructure and ore access fully developed providing access to over 6 million tonnes of ore. The focus of development now rests on Zone II which has a current mine life of over 20 years.
Following the grant of the new mining licence to include Zone II, all technical design specifications for the mine design of Zone II were submitted by 17 December 2022 with final PRC approval received in March 2023.
Diamond drilling with 3 rigs commenced in Zone II in 2022 with the recommencement of operations after the Chinese Communist Party National Congress in March 2022.
The Zone II diamond drilling program is focused on the conversion of inferred and indicated resources to proven status ahead of production and drilling will increase with 5 rigs in 2023 as development expands the drilling horizons.
Zone III diamond drilling comprising of 2 rigs will focus on expanding the 6 million tonnes of accessible ore and extending the life of mine significantly.
To support future growth strategies and sustained production the construction of a new tailings storage facility (“TSF4”) was successfully achieved in November 2022. TSF4 will utilise the existing dry stack system with industry leading safety techniques eliminating water containment and thereby preventing dam failures.
The dry stack method of tailings storage is environmentally and socially responsible with tailings upcycled into bricks and reclaimable to its original condition as grazing land at the end of its service life.
In 2022, Griffin committed to supporting renewable energy providing access to land on the closed tailings facilities 1 and 2 for a 6 megawatt solar farm and committing to local wind power projects as a consumer.
2023 will see further optimisation benefits of the 1.5 million tonne per annum growth strategy in what is expected to be the first uninterrupted year of production since the isolation of China due to Covid-19 in early 2020.
In 2023 the mine will enter its next phase of growth by seeking to progress approvals for mining in Zone V and Zone VIII and the expansion of operations below the 1000RL for ongoing sustained production out to 2050 at equivalent or higher production rates.
Year to 31st December 2022 | Year to 31st December 2021 | Year to 31st December 2020 | ||
Ore mined | Tonnes | 852,579 | 971,492 | 854,566 |
Ore processed | Tonnes | 831,549 | 985,404 | 822,058 |
Zinc in concentrate Produced | Tonnes | 31,787 | 41,587 | 32,472 |
Gold in concentrate produced | Ozs | 10,137 | 14,447 | 11,250 |
Silver in concentrate produced | Ozs | 224,587 | 269,570 | 292,301 |
Lead in concentrate produced | Tonnes | 940 | 1,069 | 1,428 |
Average zinc price received per tonne | USD | 2,513 | 2,311 | 1,638 |
Average gold price received per oz | USD | 1,814 | 1,748 | 1,752 |
Average silver price received per oz | USD | 17.9 | 20.4 | 17.6 |
Average lead price received per tonne | USD | 2,216 | 2,074 | 1,334 |
Historic production may be summarised as follows:
Caijiaying Processing Facilities
KA compliant underground vehicles at the Caijiaying Mine Site
20 tonne Haulage Trucks
Atlas Copco Underground Long Hole Production Drill Rig
Rock Bolting Rig
New 40 tonne Boiler House
New Sandvik Jumbo
Chinese Single jumbo