Griffin Mining Limited (“Griffin” or “the Company”) is pleased to publish its interim results for the six months ended 30th June 2009. During most of this period, mining operations at the Caijiaying zinc-gold mine were suspended.
Financial and Trading:
The results for the six months ended 30 June 2009, during which operations were suspended for most of this period at Caijiaying, show a pre-tax loss of US$1,354,000 compared to a profit in the six months to 30 June 2008 of US$13,047,000.
Operations at Caijiaying were suspended from January to May 2009 inclusive to allow for upgrade and maintenance work. 48,129 tonnes of low grade ore was processed in the first two months of 2009 from stockpiles mined and hauled in 2008. 33,152 tonnes of ore was processed in June following recommencement of operations. The site upgrade is continuing with ongoing work on the third tailings dam, new crushing circuit and installation of a delivered, second primary ball mill. Whilst further increases in throughput are expected during 2009, the Company does not anticipate processing rates will reach 750,000 tonnes of ore per annum until the upgrade process has been completed
In light of the fall in commodity prices in 2008/2009, a comprehensive review of costs and procedures was undertaken during the suspension of operations with a view to see if it was possible to further reduce the already very low operating costs at Caijiaying. This included the opportunity to renegotiate terms with contractors and to retrench superfluous personnel.
Since the recommencement of operations, zinc and silver metal in concentrate production has been ahead of expectations with record gold production in July. This has been the result of improved head grades and production throughput resulting from ore-body re-modelling and maintenance undertaken during the suspension of operations. Costs have, in many cases, been reduced from that incurred in 2008. Revenues have also benefited from a rise in the price of zinc since the recommencement of operations with the zinc price having reached a recent high of $1,930 per tonne compared with $1,250 at the beginning of 2009.
All further documentation required to permit mining below the 1300 level at Caijiaying has now been submitted to the Chinese authorities.
Griffin has a 39.2% equity interest in Spitfire Oil Ltd (“Spitfire”). Full provision has been made in the interim results for Griffin’s share of Spitfire’s losses. Spitfire continues to make good progress having announced a 69% increase in the previously reported resource for its 100% owned Salmon Gums lignite deposit in the south-east of Western Australia on 16 July 2009. The new reported Resource of lignite (at 4m coal thickness & 45% ashdb cut-off) is estimated to be:
- Indicated: 406 million tonnes.
- Inferred: 470 million tonnes.
- Total: 876 million tonnes
The estimate was made in accordance with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (The JORC Code, 2004).
Spitfire has reported that, if the current oil yields achieved with the test reactors in the Curtin University laboratory can be maintained at an industrial scale, then the reported resource of lignite would correspond to an in-situ pyrolysis oil resource in the range of 330 to 420 million barrels, an increase in the range of 65% to 110% over the 200 million barrels in-situ oil volumes which supported Spitfire’s admission onto AIM. Spitfire is now focusing its efforts on completing its technology definition work with the emphasis now shifting from the generation of oil to the upgrading of the pyrolysis oil into its maximum saleable form and completing its pre-feasibility studies.
Griffin held cash balances of $64.5m as at 30 June 2009. This places the Company in an enviably strong position to continue its strategy of identifying acquisition opportunities to broaden the resources and geographical profile of the Company.
In line with previous years and the Company’s policy of determining annual dividends at the time of the Company’s full year results, the Board of Griffin has not declared an interim dividend.
Chairman’s Statement
“These results, for the first six months of 2009 were to be expected considering Caijiaying was shut down during most of the reporting period. Much has been achieved in the first six months of 2009 to improve operations at Caijiaying. The full benefits of the maintenance work, cost review and ore block re-modelling earlier this year, together with the increase in commodity prices, should be reflected in the results for the second half of 2009.”
Griffin Mining Limited
Condensed Consolidated Income Statement
(expressed in thousands US dollars)
| 6 months to 30/06/2009 Unaudited |
6 months to 30/06/2008 Unaudited |
Year to 31/12/2008 Audited |
|
| $000 | $000 | $000 | |
| Revenue | 2,366 | 22,201 | 32,061 |
| Cost of sales | (3,484) | (10,621) | (18,438) |
| Gross (loss) / profit | (1,118) | 11,580 | 13,623 |
| Net operating expenses | (3,578) | (5,349) | (10,517) |
| (Loss) / profit from operations | (4,696) | 6,231 | 3,106 |
| Share of losses of associated company | (210) | – | (39) |
| Foreign exchange gains / (losses) | 3,340 | 723 | (3,221) |
| Finance income | 167 | 3,569 | 4,670 |
| Other income | 45 | 2,524 | 2,533 |
| Interest payable | – | – | (90) |
| (Loss) / profit before tax | (1,354) | 13,047 | 6,959 |
| Income tax expense | – | (1,135) | (637) |
| (Loss) / profit after tax attributable to equity share owners for the financial period | (1,354) | 11,912 | 6,322 |
| Basic (loss) / earnings per share (cents) | (0.75) | 4.83 | 2.87 |
| Diluted (loss) / earnings per share (cents) | (0.75) | 4.82 | 2.83 |
Griffin Mining Limited
Condensed Consolidated Statement Of Comprehensive income
(expressed in thousands US dollars)
| 6 months to 30/06/2009 Unaudited |
6 months to 30/06/2008 Unaudited |
Year to 31/12/2008 Audited |
|
| $000 | $000 | $000 | |
| (Loss) / profit after tax attributable to equity share owners for the financial period | (1,354) | 11,912 | 6,322 |
| Other comprehensive income | |||
| Exchange differences on translating foreign operations | (58) | 4,413 | 4,090 |
| Other comprehensive income for the period, net of tax | (58) | 4,413 | 4,090 |
| Total comprehensive income for the period attributable to equity shareholders | (1,412) | 16,325 | 10,412 |
Griffin Mining Limited
Condensed Consolidated Statement Of Financial Position
(expressed in thousands US dollars)
| 30/06/2009 | 30/06/2008 | 31/12/2008 | |
| Unaudited | Unaudited | Audited | |
| $000 | $000 | $000 | |
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 57,267 | 52,851 | 56,885 |
| Intangible assets – Exploration interests | 1,327 | 907 | 1,313 |
| Investment in associated company | 4,293 | – | 4,503 |
| 62,887 | 53,758 | 62,701 | |
| Current assets | |||
| Inventories | 2,354 | 2,431 | 3,227 |
| Other current assets | 5,715 | 5,370 | 5,564 |
| Cash and cash equivalents | 64,540 | 83,919 | 67,193 |
| 72,609 | 91,720 | 75,984 | |
| Total assets | 135,496 | 145,478 | 138,685 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 1,816 | 1,817 | 1,816 |
| Share premium | 75,942 | 75,967 | 75,950 |
| Contributing surplus | 3,690 | 3,690 | 3,690 |
| Share based payments | 6,068 | 5,131 | 5,826 |
| Other reserves | 711 | 634 | 711 |
| Foreign exchange reserve | 7,084 | 7,467 | 7,142 |
| Profit and loss reserve | 33,991 | 41,009 | 35,345 |
| Total equity | 129,302 | 135,715 | 130,480 |
| Non-current liabilities | |||
| Long-term provisions | 138 | – | 98 |
| Current liabilities | |||
| Trade and other payables | 6,056 | 9,763 | 8,107 |
| Short term bank overdrafts | – | – | – |
| Total liabilities | 6,056 | 9,763 | 8,107 |
| Total equities and liabilities | 135,496 | 145,478 | 138,685 |
| Number of shares in issue | 181,555,164 | 181,657,731 | 181,589,731 |
| Attributable net asset value / total equity per share | $0.71 | $0.75 | $0.72 |
Griffin Mining Limited
Condensed Consolidated Statement of Changes in Equity
(expressed in thousands US dollars)
| Share Capital | Share Premium | Contributing surplus | Share Based Payments | Other Reserves | Foreign Exchange Reserve | Profit and loss Reserve | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| At 31 December 2007 | 2,615 | 196,637 | 3,690 | 4,426 | 579 | 3,109 | 37,106 | 248,162 |
| Dividend paid | – | – | – | – | – | – | (8,009) | (8,009) |
| Purchase of shares for cancellation | (798) | (120,670) | – | – | – | – | – | (121,468) |
| Cost of share based payments | – | – | – | 705 | – | – | – | 705 |
| Transaction with owners | (798) | (120,670) | – | 705 | – | – | (8,009) | (128,772) |
| Retained profit for the 6 months | – | – | – | – | – | – | 11,912 | 11,912 |
| Other comprehensive income: | ||||||||
| Exchange differences on translating foreign operations | – | – | – | – | 55 | 4,358 | – | 4,413 |
| Total comprehensive income for the 6 month period | – | – | – | – | 55 | 4,358 | 11,912 | 16,325 |
| At 30 June 2008 | 1,817 | 75,967 | 3,690 | 5,131 | 634 | 7,467 | 41,009 | 135,715 |
| Regulatory transfer for future investment | – | – | – | – | 75 | – | (75) | – |
| Purchase of shares for cancellation | (1) | (17) | – | – | – | – | – | (18) |
| Cost of share based payments | – | – | – | 695 | – | – | – | 695 |
| Transaction with owners | (1) | (17) | – | 695 | 75 | – | (75) | 677 |
| Retained loss for the 6 months | – | – | – | – | – | – | (5,589) | (5,589) |
| Exchange differences on translating foreign operations | – | – | – | – | 2 | (325) | – | (323) |
| Total comprehensive income for the 6 month period | – | – | – | – | 2 | (325) | (5,589) | (5,912) |
| At 31 December 2008 | 1,816 | 75,950 | 3,690 | 5,826 | 711 | 7,142 | 35,345 | 130,480 |
| Purchase of shares for cancellation | – | (8) | – | – | – | – | – | (8) |
| Cost of share based payments | – | – | – | 242 | – | – | – | 242 |
| Transaction with owners | – | (8) | – | 242 | – | – | – | 234 |
| Retained loss for the 6 months | – | – | – | – | – | – | (1,354) | (1,354) |
| Other comprehensive income: | ||||||||
| Exchange differences on translating foreign operations | – | – | – | – | – | (58) | – | (58) |
| Total comprehensive income for the 6 month period | – | – | – | – | – | (58) | (1,354) | (1,412) |
| At 30 June 2009 | 1,816 | 75,942 | 3,690 | 6,068 | 711 | 7,084 | 33,991 | 129,302 |
Griffin Mining Limited
Condensed Consolidated Cash Flow Statement
(expressed in thousands US dollars)
| 6 months to 30/06/2009 Unaudited |
6 months to 30/06/2008 Unaudited |
Year to 31/12/2008 Audited |
|
| $000 | $000 | $000 | |
| Net cash flows from operating activities | |||
| (Loss) / profit before taxation | (1,354) | 13,047 | 6,959 |
| Share of associated company loss | 210 | – | 39 |
| Foreign exchange (gains) / losses | (3,340) | (723) | 3,221 |
| Taxation paid | – | (1,135) | (637) |
| Finance income | (167) | (3,569) | (4,670) |
| Adjustment in respect of share based payments | 242 | 705 | 1,400 |
| Depreciation, depletion and amortisation | 384 | 953 | 2,844 |
| Provisions | 41 | – | 98 |
| Decrease in inventories | 873 | 2,208 | 1,412 |
| (Increase) in other current assets | (152) | (1,215) | (1,101) |
| (Decrease) / increase in trade and other payables | (2,051) | 4,716 | 3,059 |
| Net cash (outflow) / inflow from operating activities | (5,314) | 14,987 | 12,624 |
| Cash flows from investing activities | |||
| Interest received | 167 | 3,569 | 4,670 |
| Payments to acquire intangible fixed assets | (12) | – | (388) |
| Payments to acquire tangible fixed assets | (827) | (5,249) | (11,074) |
| Payments to acquire interest in associated company | – | – | (4,542) |
| Net cash (outflow) from investing activities | (672) | (1,680) | (11,334) |
| Cash flows from financing activities | |||
| Purchase of shares for cancellation | (8) | (121,469) | (121,486) |
| (8) | (121,469) | (121,486) | |
| Dividends paid | – | (8,008) | (8,008) |
| (Decrease) in cash and cash equivalents | (5,994) | (116,170) | (128,204) |
| Cash and cash equivalents at beginning of the period | 67,193 | 199,283 | 199,283 |
| Effects of exchange rate changes | 3,341 | 806 | (3,886) |
| Cash and cash equivalents at end of the period | 64,540 | 83,919 | 67,193 |
| Cash and cash equivalents comprise | |||
| Bank deposits | 64,540 | 83,919 | 67,193 |
| Total | 64,540 | 83,919 | 67,193 |
Griffin Mining Limited Notes to the Interim Statement
- These 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 31December2008 except for the adoption of IAS1 Presentation of Financial Statements (Revised 2007).
- Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company’s London office, 60 St James’s Street, London, SW1A 1LE.
- 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 condensed consolidated statement of financial position at 31 December 2008 and the condensed consolidated income statement, condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the year then ended have been extracted from the Group’s 2008 statutory financial statements upon which the auditors’ opinion is unqualified. The condensed consolidated statement of comprehensive income has been prepared using information extracted from the Group’s 2008 statutory financial statements.
- 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. There is no dilutive earnings per share in the 6 months to 30 June 2009 due to the incidence of losses. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:
| 6 months to 30/06/2009 Unaudited | |||
| Earnings $000 | Weighted average number of shares | Per share amount (cents) | |
| Basic earnings per share | |||
| (Loss) / earnings attributable to ordinary shareholders | (1,354) | 181,555,355 | (0.75) |
| Dilutive effect of securities | |||
| Options | – | ||
| Diluted earnings per share | (1,354) | 181,555,355 | (0.75) |
| 6 months to 30/06/2008 Unaudited | |||
| Earnings $000 | Weighted average number of shares | Per share amount (cents) | |
| Basic earnings per share | |||
| (Loss) / earnings attributable to ordinary shareholders | 11,912 | 246,509,760 | 4.83 |
| Dilutive effect of securities | |||
| Options | 66,198 | ||
| Diluted earnings per share | 11,912 | 246,575,958 | 4.82 |
| Year to 31/12/2008 Audited | |||
| Earnings $000 | Weighted average number of shares | Per share amount (cents) | |
| Basic earnings per share | |||
| (Loss) / earnings attributable to ordinary shareholders | 6,322 | 220,587,242 | 2.87 |
| Dilutive effect of securities | |||
| Options | 3,090,342 | ||
| Diluted earnings per share | 6,322 | 223,677,584 | 2.83 |
