Griffin Mining Limited (“Griffin” or “the Company”) is very pleased to publish its interim results for the six months ended 30th June 2011.

Highlights:

• Increased revenues of $33.9m (2010 $27.0m)
• Increased operating profit of $15.4m (2010 $11.2m)
• Increased profit before tax of $17.9m (2010 $8.7m)
• Increased profit after tax of $13.6m (2010 $6.8m)
• Increased attributable profit after tax of $8.5m (2010 $2.0m)
• Increased attributable earnings per share of 4.8 cents (2010 1.1 cent)
• Reduced overhead costs of $5.5m (2010 $5.8m)
• Record ore processed of 319,525 tonnes (2010 260,317 tonnes)
• Record zinc metal in concentrate produced of 16,069 tonnes (2010 15,101 tonnes)
• Record silver in concentrate produced of 117,036 ozs (2010 105,475 ozs)

Financial and Trading:

The results for the six months ended 30th June 2011 show a pre-tax profit of US$17,871,000 compared to a profit in the six months to 30th June 2010 of US$8,658,000. There has been an increase in turnover and operating profits despite a slow start in ramping up production at the beginning of the year following the suspension in operations in the later part of 2010. Although head grades were slightly lower than that in the same period in 2010, record zinc metal production of 16,069 tonnes was achieved in the period. Gold production of 4,493 ozs was marginally less than that achieved in 2010 of 4,570 ozs, however, gold recoveries and grades have begun to improve significantly. With the completion of the upgrade of the processing plant to a minimum capacity of 750,000 tonnes of ore per annum, mining and processing rates have stepped up during the period to meet the new processing capacity.

Operating costs have been reduced from $5,829,000 in six months to 30th June 2010 to $5,469,000 in the six months to 30th June 2011 which, with increased gross profits, resulted in increased operating profits of $15,382,000 compared to $11,201,000 in 2010.

The results for the first six months of 2011 have benefited from foreign exchange gains of $2,221,000 (2010 losses $3,061,000) arising as a result of a weakening US dollar against the Renminbi and Sterling.

Griffin has a 39.2% equity interest in Spitfire Oil Ltd (“Spitfire”). Griffin’s share of Spitfire’s profits of $28,000 (2010 losses $127,000) have been recognised in the interim results.

Interest receivable of $228,000 (2010 $149,000) was recorded in the period with Griffin holding substantial cash balances amounting to $74.7m as at 30th June 2011. This equates to 42.5 cents (26.5p) per share in issue. With no put options or any other form of hedging in place there were no gains or losses arising on the revaluation of financial instruments (2010 gains $201,000).

During the period, 5,040,000 shares were bought back on market for cancellation at a cost of $4,977,000.

At 30th June 2011, attributable net assets per share in issue amounted to 82 cents (62.5p) compared with 76 cents (47.5p) at 30th June 2010.

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

Chairman Mladen Ninkov commented, “The half yearly results provide clear evidence of the progress which has been made at Caijiaying and the resulting benefits to Griffin and its shareholders. The potential of Caijiaying has only just begun to be tapped with the recently upgraded processing, increased throughput and stabilized metal prices. The Company expects to produce even better results in the second half of the year.

Nevertheless the Company continues to look to the future. Constant consideration is given to continuing to increase mining and throughput at Caijiaying. Work is well advanced towards making an application for a mining licence at the Zone II deposit, just over a kilometre to the south of the existing mine. Finally, investigations continue in evaluating tenements, mining operations and or mining companies which hold premium mining assets which could add significant shareholder value. The Company looks forward to progressing these possibilities for the benefit of its shareholders.”

Griffin Mining Limited
Condensed Consolidated Income Statement
(expressed in thousands US dollars)

	6 months to 30/06/2011 Unaudited	6 months to 30/06/2010 Unaudited	Year to 31/12/2010 Audited
	$000	$000	$000
Revenue	33,938	27,014	41,050
Cost of sales	(13,087)	(9,984)	(16,780)
Gross profit	20,851	17,030	24,270
Net operating expenses	(5,469)	(5,829)	(11,127)
Profit from operations	15,382	11,201	13,143
Share of profits / (losses) of associated company	28	(127)	(109)
Foreign exchange gains / (losses)	2,221	(3,061)	38
Finance income	228	614	350
Finance (losses)	(14)	–	(2,224)
Other income	26	31	38
Profit before tax	17,871	8,658	11,236
Income tax expense	(4,273)	(1,809)	(2,376)
Profit after tax	13,598	6,849	8,860
Attributable to non controlling interests	5,102	4,815	6,116
Attributable to equity share owners of the parent	8,496	2,034	2,744
	13,598	6,849	8,860
Basic earnings per share (cents)	4.79	1.12	1.51
Diluted earnings per share (cents)	4.65	1.10	1.49

 

Griffin Mining Limited
Condensed Consolidated Statement Of Comprehensive income
(expressed in thousands US dollars)

	6 months to 30/06/2011 Unaudited	6 months to 30/06/2010 Unaudited	Year to 31/12/2010 Audited
	$000	$000	$000
Profit for the financial period	13,598	6,849	8,860
Other comprehensive income
Exchange differences on translating foreign operations	903	343	1,374
Other comprehensive income for the period, net of tax	903	343	1,374
Total comprehensive income for the period	14,501	7,192	10,234
Attributable to minority interests	5,452	4,831	6,218
Attributable to equity share owners of the parent	9,049	2,361	4,016
	14,501	7,192	10,234

 

Griffin Mining Limited
Condensed Consolidated Statement Of Financial Position
(expressed in thousands US dollars)

	30/06/2011	30/06/2010	31/12/2010
	Unaudited	Unaudited	Audited
	$000	$000	$000
ASSETS
Non-current assets
Property, plant and equipment	80,368	68,847	77,745
Intangible assets – Exploration interests	1,537	1,437	1,481
Investment in associated company	3,905	3,859	3,877
	85,810	74,143	83,103
Current assets
Inventories	4,277	3,381	3,136
Other current assets	2,248	8,145	3,423
Cash and cash equivalents	74,652	67,070	66,450
	81,177	78,596	73,009
Total assets	166,987	152,739	156,112
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,755	1,815	1,804
Share premium	70,061	75,807	74,948
Contributing surplus	3,690	3,690	3,690
Share based payments	2,775	1,329	2,513
Other reserves	959	764	938
Foreign exchange reserve	9,011	7,556	8,480
Profit and loss reserve	56,127	47,075	47,631
Total equity attributable to equity holders of the parent	144,378	138,036	140,004
Minority interests	9,642	4,831	6,218
Total Equity	154,020	142,867	146,222
Non-current liabilities
Long-term provisions	1,197	1,076	768
Current liabilities
Taxation payable	2,939	1,018	1,011
Trade and other payables	8,831	7,778	8,111
Total liabilities	11,770	8,796	9,122
Total equities and liabilities	166,987	152,739	156,112
Number of shares in issue	175,501,830	181,538,496	180,408,496
Attributable net asset value / total equity per share	$0.82	$0.76	$0.78

 

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 attributable to equity holders of parent	Minority Interests	Total Equity
	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
At 31 December 2009	1,817	75,984	3,690	4,790	759	7,234	40,440	134,714	2,616	137,330
Issue of share capital	3	94	–	–	–	–	–	97	–	97
Purchase of shares for cancellation	(5)	(271)	–	–	–	–	–	(276)	–	(276)
Cost of share based payments	–	–	–	1,140	–	–	–	1,140	–	1,140
Transfer in respect of share based payments	–	–	–	(4,601)	–	–	4,601	–	–	–
Transfer other current assets	–	–	–	–	–	–	–	–	(2,616)	(2,616)
Transaction with owners	(2)	(177)	–	(3,461)	–	–	4,601	961	(2,616)	(1,655)
Retained profit for the 6 months	–	–	–	–	–	–	2,034	2,034	4,815	6,849
Other comprehensive income:
Exchange differences on translating foreign operations	–	–	–	–	5	322	–	327	16	343
Total comprehensive income for the 6 month period	–	–	–	–	5	322	2,034	2,361	4,831	7,192
At 30 June 2010 (unaudited)	1,815	75,807	3,690	1,329	764	7,556	47,075	138,036	4,831	142,867
Regulatory transfer for future investment	–	–	–	–	153	–	(153)	–	–	–
Purchase of shares for cancellation	(11)	(859)	–	–	–	–	–	(870)	–	(870)
Cost of share based payments	–	–	–	1,184	–	–	–	1,184	–	1,184
Transaction with owners	(11)	(859)	–	1,184	153	–	(153)	314	–	314
Retained profit for the 6 months	–	–	–	–	–	–	709	709	1,301	2,010
Other comprehensive income:
Exchange differences on translating foreign operations	–	–	–	–	21	924	–	945	86	1,031
Total comprehensive income for the 6 month period	– –	–	–	–	21	924	709	1,654	1,387	3,041
At 31 December 2010	1,804	74,948	3,690	2,513	938	8,480	47,631	140,004	6,218	146,222
Issue of share capital	1	40	–	–	–	–	–	41	–	41
Purchase of shares for cancellation	(50)	(4,927)	–	–	–	–	–	(4,977)	–	(4,977)
Cost of share based payments	–	–	–	262	–	–	–	262	–	262
Transfer other current assets	–	–	–	–	–	–	–	–	(2,028)	(2,028)
Transaction with owners	(49)	(4,887)	–	262	–	–	–	(4,674)	(2,028)	(6,702)
Retained loss for the 6 months	–	–	–	–	–	–	8,496	8,496	5,102	13,598
Other comprehensive income:
Exchange differences on translating foreign operations	–	–	–	–	21	531	–	552	350	902
Total comprehensive income for the 6 month period	–	–	–	–	21	531	8,496	9,048	5,452	14,500
At 30 June 2011 (unaudited)	1,755	70,061	3,690	2,775	959	9,011	56,127	144,378	9,642	154,020

 

Griffin Mining Limited
Condensed Consolidated Cash Flow Statement
(expressed in thousands US dollars)

	6 months to 30/06/2011 Unaudited	6 months to 30/06/2010 Unaudited	Year to 31/12/2010 Audited
	$000	$000	$000
Net cash flows from operating activities
Profit before taxation	17,871	8,658	11,236
Share of associated company (profits) / losses	(28)	127	109
Foreign exchange (gains) / losses	(2,221)	3,061	(38)
Finance (income)	(228)	(614)	(350)
Finance losses	14	–	2,224
Adjustment in respect of share based payments	262	1,140	2,323
Depreciation, depletion and amortisation	2,555	1,282	2,151
Provisions	455	333	–
(Increase) in inventories	(1,141)	(601)	(356)
(Increase) in other current assets	(867)	(2,777)	(747)
Increase in trade and other payables	719	3,111	3,445
Net cash inflow from operating activities	17,391	13,720	19,997
Taxation paid	(2,346)	(2,363)	(2,936)
Cash flows from investing activities
Interest received	228	148	350
Payments to acquire intangible fixed assets	(21)	(7)	(10)
Payments to acquire tangible fixed assets	(3,522)	(6,501)	(14,484)
Payments to acquire financial assets	–	(2,238)	(2,238)
Net cash (outflow) from investing activities	(3,315)	(8,598)	(16,382)
Cash flows from financing activities
Issue of ordinary share capital	41	97	97
Purchase of shares for cancellation	(4,977)	(276)	(1,146)
	(4,936)	(179)	(1,049)
Dividends paid	–	–	–
Increase / (decrease) in cash and cash equivalents	6,794	2,580	(370)
Cash and cash equivalents at beginning of the period	66,450	67,630	67,630
Effects of exchange rate changes	1,408	(3,140)	(810)
Cash and cash equivalents at end of the period	74,652	67,070	66,450

 

Griffin Mining Limited
Notes to the Interim Statement

1. 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 31December2010.

2. 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.

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 condensed consolidated statement of financial position at 31 December 2010 and the condensed consolidated income statement, condensed consolidated statement of comprehensive income, 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 2010 statutory financial statements upon which the auditors’ opinion is unqualified.

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

	6 months to 30/06/2011 Unaudited			6 months to 30/06/2010 Unaudited			Year to 31/12/2010 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 earnings per share
Earnings attributable to ordinary shareholders	8,496	177,513,948	4.79	2,034	181,836,513	1.12	2,744	181,579,409	1.51
Dilutive effect of securities
Options	–	5,385,543			2,602,749			2,648,124
Diluted earnings per share	8,496	182,899,491	4.65	2,034	184,439,252	1.10	2,744	184,227,533	1.49