RNS Number:0072D
Griffin Mining Ld
16 May 2006
16th MAY 2006
PRELIMINARY STATEMENT OF RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2005
Griffin Mining Limited ("Griffin" or "the Company") has today published its
results for the year ended 31 December 2005.
Highlights:
* Successful commissioning of the Caijiaying Zinc-Gold mine in China in
July 2005
* First profit from operations in 2005 of US$426,000 (2004 loss restated
US$1,557,000), and a consolidated profit for the year of US$311,000
(2004 loss restated US$111,000)
* Operating profit of US$1,283,000 in the six months to 31 December 2005
* Significant increases in production and recovery rates
* Ongoing exploration programme to investigate further zinc and gold
mineralisation
* Continued evaluation of further economically justifiable acquisitions
Chairman's statement:
The Company has successfully developed, built, commissioned and now operates
very profitably, the Caijiaying Zinc-Gold mine in the People's Republic of China
(the "PRC"). This is a landmark achievement for the Company, the mining industry
and the PRC.
At Company level, the Caijiaying mining operations guarantee the long-term
financial success of Griffin. This financial success has been even further
enhanced by the dramatic rise in the price of commodities, and in particular,
the extraordinary rise in the price of zinc. The Company's feasibility study was
commissioned using a US$760 a tonne zinc price. Knowing that mining is
essentially a fixed cost business, next year's financial statements should
admirably exhibit what a zinc price of US$3,300 a tonne can do for the financial
performance of the Company.
Of course, this is just the beginning. With no debt on the balance sheet, no
hedging commitments and a fully built and operating processing plant at
Caijiaying located adjacent to a long life ore body, the financial future of the
Company has been well secured. However, the Company remains fully focused on
generating even greater returns for its shareholders. This will be achieved in
three major ways:
1. A continuing drive to expand the throughput and, ipso facto, the amount of
zinc metal being generated by the Caijiaying processing facilities. The
plant was designed and built to process 200,000 tonnes of ore per annum.
Within seven months, the Company has already increased throughput by 50% and
is currently processing approximately 300,000 tonnes of ore on an annualised
basis. A striking achievement by the Company. Needless to say, the Company
continues to drive to increase throughput even further.
2. As evidenced by the announcements made by the Company during the year, the
exploration potential of the greater Caijiaying area improves every day as
we seek to discover the mysteries that Mother Nature has hidden beneath the
surface. As this is written and spring rears its head, an RC drill rig has
been mobilized at Caijiaying to begin drilling the epithermal gold targets
south of Zone II. Furthermore, the Company has approved the driving of
another decline into Zone II, from the base of which the Company has
commissioned a significant underground drilling programme to investigate
further zinc and gold mineralisation. The Company has every hope that Zone
II will become a second mine for the Company and an alternative source of
ore for the Caijiaying processing plant.
3. The Company continues to investigate and evaluate further potential
acquisitions. That process has become substantially more difficult by the
buoyancy of the commodities market which has filtered through to the
financing of a large number of marginal and uneconomic mineral deposits.
This will, inevitably, end in tears. In the interim, it has made the
acquisition of any worthwhile project, of which there are very few,
prohibitively expensive and incapable of being economically justified. The
Company continues to move forward on a number of projects which will only be
consummated if they display the risk reward profile required to generate the
returns expected by the shareholders of the Company.
My hope is that the Company has repaid the loyalty, patience and financial
commitment of its shareholders over the past eight years. The Company has, and
will continue, to strive to do even better.
Mladen Ninkov
Chairman
16th May 2006
Further information
Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772
Roger Goodwin - Finance Director
Griffin Mining Limited
Andrew Smith / Martin Eales Telephone: +44(0)20 7523 8350
Collins Stewart Limited
Hugo de Salis Telephone: +44(0) 20 7242 4477
St Brides Media & Finance Ltd
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
Consolidated Income Statement
For the year ended 31 December 2005
(expressed in thousands US dollars)
2005 2004
Restated
$000 $000
Revenue 6,120 -
Cost of sales (2,440) -
Gross Profit 3,680 -
Net operating expenses (3,254) (1,557)
Profit / (loss) from operations 426 (1,557)
Foreign exchange (losses) / gains (411) 939
Finance income 296 507
Profit / (loss) before tax 311 (111)
Income tax expense - -
Profit / (loss) after tax attributable to equity share owners for the financial 311 (111)
year
Basic and diluted earnings / (loss) per share (cents) 0.17 (0.07)
Griffin Mining Limited
Consolidated Balance Sheet
As at 31 December 2005
(expressed in thousands US dollars)
2005 2004
Restated
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 27,070 16,894
Intangible assets - Exploration interests 419 39
27,489 16,933
Current assets
Inventories 1,620 -
Other current assets 947 276
Available-for-sale financial assets 63 27
Cash and cash equivalents 6.663 12,985
9,293 13,288
Total assets 36,782 30,221
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 1,838 1,773
Share premium 39,040 36,594
Contributing surplus 3,690 3,690
Share based payments 842 509
Investment revaluation reserve - -
Foreign exchange reserve 215 (143)
Profit and loss reserve (12,740) (13,087)
Total equity 32,885 29,336
Non-current liabilities
Long-term provisions 372 -
Current liabilities
Trade and other payables 3,525 885
Total liabilities 3,897 885
Total equities and liabilities 36,782 30,221
Number of shares in issue 183,827,731 177,327,731
Attributable net asset value / total equity per share $0.18 $0.17
Griffin Mining Limited
Consolidated Statement of Changes in Equity
For the year ended 31 December 2005
(expressed in thousands US dollars)
Share Share Contributing Share Investment Foreign Profit Total
capital Premium surplus based revaluation Exchange and
payments reserve Reserve loss
$000 $000 $000 $000 $000 $000 $000 $000
At 31 December 2003 1,352 21,385 3,690 - (811) (121) (12,130) 13,365
Exchange differences - - - - - (22) - (22)
on translating
foreign operations
Loss for the year - - - - - - (111) (111)
Movement in fair (35) (35)
value of financial
assets
Issue of share 421 15,209 - - - - - 15,630
capital
Cost of share based - - - 509 - - - 509
payments
Transfer - - - - 811 - (811) -
At 31 December 2004 1,773 36,594 3,690 509 - (143) (13,087) 29,336
Exchange differences - - - - - 358 - 358
on translating
foreign operations
Profit for the year - - - - - - 311 311
Movement in fair 36 36
value of financial
assets
Issue of share 65 2,446 - - - - - 2,511
capital
Cost of share based - - - 333 - - - 333
payments
At 31 December 2005 1,838 39,040 3,690 842 - 215 (12,740) 32,885
Griffin Mining Limited
Consolidated Cash Flow Statement
For the year ended 31 December 2005
(expressed in thousands US dollars)
2005 2004
Restated
$000 $000
Net cash flows from operating activities
Profit/(loss) before taxation 311 (111)
Foreign exchange losses 360 93
Finance income (296) (507)
Adjustment in respect of share options 333 509
Depreciation, depletion and amortisation 557 5
Increase in inventories (1,620)
(Increase) in other current assets (671) (177)
Increase in trade and other payables 2,640 799
Net cash inflow from operating activities 1,614 611
Cash flows from investing activities
Interest received 296 507
Payments to acquire intangible fixed assets (376) (557)
Payments to acquire tangible fixed assets - mineral interests (6,949) (5,082)
Payments to acquire tangible fixed assets - plant and equipment (3,409) (4,938)
Payments to acquire tangible fixed assets - other (9) (17)
Net cash (outflow) from investing activities (10,447) (10,087)
Cash flows from financing activities
Issue of ordinary share capital 2,511 16,391
Expenses paid in connection with share issue - (761)
2,511 15,630
Increase/(decrease) in cash and cash equivalents (6,322) 6,154
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 240 of the
UK Companies Act 1985. The summarised consolidated balance sheet at 31 December
2005 and the summarised consolidated income statement, 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 2005 statutory financial
statements upon which the auditors' opinion is unqualified. The results for the
year ended 31 December 2004 have been extracted from the statutory accounts for
that period, which contain an unqualified auditors' report.
3. Griffin has applied International Financial Reporting Standards (IFRS) to
its 2005 accounts in full. The adoption of revised IFRS2, covering share based
payments, has resulted in a charge to profit in 2005 of $333,000 and an
adjustment to the 2004 results for a charge to profit and loss of $509,000. The
adoption of revised International Accounting Standard 39 covering financial
instruments has resulted in gains of $36,000 (2004 losses $35,000) being
recognised in respect of the Company's marketable securities held for investment
being taken to equity.
4. The annual report and accounts for 2005 together with the notice of the
Annual General Meeting to be held on 16 June 2006 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.
5. The calculation of the basic earnings/(loss) 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.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
2005 2004
Earnings Weighted Per share Loss Weighted Per share
average amount average number amount
$000 number of $000 of shares
shares (cents) (cents)
Basic earnings/(loss)
per share
Earnings attributable 311 180,639,032 0.17 (111) 170,646,361 0.07
to ordinary
shareholders
Dilutive effect of
securities
Options 3,677,894 -
Diluted earnings/(loss) 311 184,316,926 0.17 (111) 170,646,361 0.07
per share
This information is provided by RNS
The company news service from the London Stock Exchange
END
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