Griffin Mining Ld - Final Results
07 April 1998 - 4:00PM
UK Regulatory
RNS No 7049b
GRIFFIN MINING LIMITED
7th April 1998
GRIFFIN MINING LIMITED
PRELIMINARY RESULTS FOR 1997
The following is an extract from the Chairman's' statement that will accompany
the annual report and accounts of Griffin Mining Limited for the year ended 31
December 1997.
"1997 has been a year of dramatic change in your company. At the beginning of
the year the Company was operating as European Mining Finance Limited ("EMF").
It was continuing to pursue a strategy of development as a mining finance
house, managed by a Board of Directors that had, with the exception of my
appointment at the end of 1996, remained unchanged since 1993. Despite the
favourable conditions that prevailed in the natural resource sector in the
early 1990's, the strategy had not been successful. EMF remained a small
underperforming company, largely ignored by the capital markets. By the end of
1997 the Company had a completely new management team, a new name and
strategy, and had completed the acquisition of a controlling interest in a
major project with the potential to transform the fortunes of the Company:
China Zinc Pty Limited. ("China Zinc").
Whilst I believe these developments to have been hugely positive for the
future of Griffin Mining Limited ("Griffin"), this has not been achieved
without pain. The attached financial statements for the year ended 31 December
1997 in part reflect the cost of effecting a long overdue change in the
management of Griffin. They also reflect a year in which the minerals sector
has suffered greatly from a loss of investor interest following the Bre-X
affair, and the fall in the prices of gold and base metals. Valuations of
mineral assets throughout the world have fallen substantially against this
background.
As indicated in the announcements dated 26 November and 12 December 1997, the
new Board of Griffin has undertaken a review of all the Company's assets and
concluded as to appropriate carrying values. The balance sheet at 31 December
1997 reflects significant write downs in the carrying value of a number of the
Company's assets.
Notwithstanding the fall in net asset value during the year as shown by the
audited balance sheet, Griffin starts 1998 with enormous potential by virtue
of the successful acquisition of China Zinc late in 1997. Clearly, this
potential has still to be reflected in the share price performance. To address
this the Board intends both to add value to Griffin's principal asset by
commencing a significant work programme at China Zinc's Caijiaying zinc-gold
project during 1998, and actively to communicate the attractions of the
project to the investor community in Europe and North America.
The work programme at Caijiaying will involve infill diamond drilling,
extension of the existing decline, bulk sampling and metallurgical testwork,
additional assaying work on the existing 98,000 metres of core with particular
emphasis on gold values, and hydrological and environmental studies. The
programme is principally designed to allow the orebody at Caijiaying to be
defined to bankable levels and to determine, with greater accuracy, the levels
of gold credits that will be achieved in production. The planned work
represents the first stage in the completion of a bankable feasibility study
for the project.
In addition to this development work, Griffin plans to undertake some earlier
stage exploration work in zones of the licence area adjacent to zone III where
the initial open pit is proposed to be located. It is hoped that this
exploration work will support the Board's belief that the reserve at
Caijiaying is significantly greater than the already huge reserve indicated in
the Bateman Kinhill study of 27 million tonnes at 6.87% zinc, plus associated
credits of gold, silver, lead, gallium and other minerals.
In order to fund the Caijiaying work programme, Griffin intends to raise
additional monies from the issue of new securities during 1998.
Your new Board's strategy is to focus on the development of assets that have
the potential to be world class mining assets. Accordingly, Griffin is no
longer actively trading its small portfolio of minority equity investments in
junior mining companies, most of which are listed in Canada. This portfolio
will be sold when attractive prices for these stocks can be achieved.
The company's investment in Burkina Faso currently represents its single
largest cash investment with in excess of US$2 million now accumulated as a
loan to the local operating company. Griffin is now in advanced discussions
with the International Finance Corporation ("IFC") which may result in the IFC
offering to provide a significant proportion of the finance required to
establish small scale production at the Guiro deposit. Discussions continue
with a number of other parties with a view to securing the future of
investments in Botswana, the United Kingdom and Scandinavia.
Until 1997,Griffin was a company that had been allowed to drift for too long.
The strategy being pursued by management was not capable of transforming the
fortunes of your company. The actions that were taken by certain shareholders
in 1997 to address this situation did cause a period of uncertainty during the
year but were necessary to provide a future for your company. Your new Board
has a clear view as to what is required to build Griffin into a substantial
corporate entity. The Company has a core project around which this vision can
be realised and I look forward to 1998 as a year in which Griffin can emerge
from its unexciting past to deliver, for the first time, real value to you,
its shareholders."
Further information:
Craig Niven (Chairman) - Griffin Mining Limited - Tel: 0171-321-2077
Stephen Goschalk - English Trust Company Limited - Tel: 0171-608-0888
Griffin Mining Limited was registered in Bermuda in 1988 and its shares and
warrants are listed on the Luxembourg Stock Exchange, quoted on the
Alternative Investment Market (AIM) of the London Stock Exchange (symbol GFM)
and traded on the Canadian Dealing Network in Toronto (symbol GRFM). Corporate
information and share prices can be accessed via the Newstrack Service on
Reuters (symbol GFM.L) (page JPJA), Bloomberg (symbol GFM LN), ICV Topic
(*1180) QST/Quotron (NTRACK). The share price is also published daily in the
Financial Times and London Evening Standard. The Company's news releases are
available through Canadian Corporate News' Internet Home Page:
htp://www.cdn-news.com
GRIFFIN MINING LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 1997
(expressed in thousands US dollars)
1997 1996
As restated
$000 $000
INCOME
Royalties - 36
Gains on the disposal of investments 139 578
Surplus on settlement of litigation - 223
Other income 18 23
---- ----
157 860
Net operating expenses (882) (498)
Provisions in respect of continuing operations (3,226) (181)
Release of negative goodwill 183 -
----- -----
OPERATING (LOSS) / (PROFIT) (3,768) 181
Foreign exchange (losses) / gains (3) 25
Interest receivable and similar income 53 34
----- -----
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION (3,718) 240
Taxation on ordinary activities - (3)
----- -----
(LOSS)/PROFIT FOR THE FINANCIAL YEAR (3,718) 237
===== =====
(Loss) / earnings per share (cents) (note 1) (46.0) 4.2
GRIFFIN MINING LIMITED
CONSOLIDATED BALANCE SHEET
As at 31 December 1997
(expressed in thousands US dollars)
1997 1996
As restated
$000 $000
FIXED ASSETS
Intangible assets 5,427 4,855
Tangible assets 360 472
Investments - 824
----- -----
5,787 6,151
----- -----
CURRENT ASSETS
Portfolio investments 529 1,149
Accounts receivable 157 470
Prepaid expenses 23 19
Cash and deposits 402 853
----- -----
1,111 2,491
----- -----
CREDITORS: Amounts falling due within one year
Accrued expenses (85) (200)
Creditors (63) (55)
----- -----
NET CURRENT ASSETS 963 2,236
----- -----
Negative goodwill (778) (961)
----- -----
TOTAL NET ASSETS 5,972 7,426
===== =====
CAPITAL AND RESERVES
Share capital 818 568
Shares to be issued (note 2) 780 -
Share premium 10,878 10,189
Investment revaluation reserve (717) (40)
Foreign exchange reserve 170 267
Profit & loss account (8,318) (4,600)
----- -----
Equity shareholders' funds 3,611 6,384
Equity minority interests 2,361 1,042
----- -----
Equity interests 5,972 7,426
===== =====
Number of shares in issue and
to be issued 10,408,154 5,678,154
Attributable net asset value per share $0.35 $1.12
GRIFFIN MINING LIMITED
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 December 1997
(expressed in thousands US dollars)
1997 1996
As restated
$000 $000
(Loss) / profit for the financial year (3,718) 237
Unrealised (loss) / gain on investments (677) 225
Currency translation differences in
foreign currency net investments (97) 178
----- ----
Total gains and losses recognised in the year (4,492) 640
===== ====
Note on prior year adjustment:
Total recognised gains and losses
related to the year as above (4,492)
Prior period adjustment to profit (43)
Prior period adjustment to foreign
currency net investments 7
-----
Total gains and losses recognised
since last annual report (4,528)
=====
Losses and profits for the financial year are the same as those on an
historical cost basis
GRIFFIN MINING LIMITED
CASH FLOW STATEMENT
For the year ended 31 December 1997
(expressed in thousands US dollars)
1997 1996
$000 $000
NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES (601) 15
Return on investments and servicing of finance
Interest received 53 34
---- ----
Net cash inflow from returns on
investments and servicing of finance 53 34
---- ----
Taxation paid - (3)
---- ----
INVESTING ACTIVITIES
Payments to acquire intangible fixed assets (192) (597)
Payments to acquire tangible fixed assets (23) (3)
Payments to acquire investments (89) (113)
Payments to acquire subsidiary undertakings (538) -
Redemption of royalty and debt recovery - 375
---- ----
Net cash (outflow) from investing activities (842) (338)
---- ----
NET CASH (OUTFLOW) BEFORE FINANCING (1,390) (292)
FINANCING
Issue of ordinary share capital 1,000 -
Expenses paid in connection with share issue (61) -
----- ----
939 -
----- ----
(DECREASE) IN CASH AND CASH EQUIVALENTS (451) (292)
===== ====
Reconciliation of operating (loss) / profit to net cash (outflow) / inflow
from operating activities
Operating (loss) / profit (3,768) 181
Depreciation 9 6
Gains on sale of investments (139) (578)
Receipts on the sale of investments 1,390 737
Payments to acquire investments (1,330) (227)
Provisions in respect of continuing
operations 3,226 181
Release of negative goodwill (183) -
Fixed asset investment costs written off - 88
Decrease / (increase) in debtors 308 (393)
Increase/(decrease) in creditors (107) 23
Other non-cash income, including
exchange differences (7) (3)
---- ----
(601) 15
==== ====
GRIFFIN MINING LIMITED
NOTES
1. (Loss) / Earnings per share
Earnings per share have been calculated on the basis of the net loss after
taxation of US$3,718,000 (US$237,000 profit in 1996) and the weighted average
number of shares in issue in the year ended 31 December 1997 of 8,068,565
(5,678,154 in 1996).
2. Shares to be issued.
On 23 January 1998 the Company issued 2,230,000 new ordinary shares at US$0.35
each as part of the consideration for a 50% interest in China Zinc Pty
Limited.
The Annual Report and Accounts of the Company for 1997 will be sent to
shareholders shortly.
END
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