TIDMGFM
RNS Number : 3237K
Griffin Mining Ld
10 April 2018
Griffin Mining Limited
Royal Trust House, 54 Jermyn Street, London SW1Y 6LX, United
Kingdom
Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629
7773
E mail: griffin@griffinmining.com
10(th) April 2018
Results For 2017 and Annual Report and Accounts
RECORD REVENUES: $126.7 million up 91%
RECORD OPERATING PROFIT: $63.8 million up 319%
RECORD PROFIT BEFORE TAX: $60.9 million up 486%
RECORD PROFIT AFTER TAX: $43.3 million up 633%
RECORD EARNINGS PER SHARE: 24.6 cents up 645%
RECORD ORE MINED, HAULED & PROCESSED
RECORD ZINC & GOLD PRODUCED
Griffin Mining Limited ("Griffin" or the "Company") has today
published its annual report and accounts for the year ended 31st
December 2017 and is available on the Company's web site
www.griffinmining.com.
Griffin and its subsidiaries (together the "Group") recorded
record production, revenues and profits in 2017 with;
-- Revenues of $126,657,000 (2016: $66,270,000) up 91%;
-- Operating profit of $63,773,000 (2016: $15,201,000) up 319%;
-- Profit before tax of $60,877,000 (2016: $10,382,000) up 486%;
-- Profit after tax of $43,321,000 (2016: $5,914,000) up 633%; and
-- Earnings per share of 24.6 cents (2016: 3.3 cents) up 645%.
Cash generated from operating activities of $77.4m enabled all
bank loans to be repaid with $46m repaid in 2017 as well enabling
the Group to invest $13.3m in further development of the Caijiaying
mine, exploration and equipment purchases.
Record tonnes of ore were mined, hauled and processed in 2017
with:
-- Ore mined of 920,168 tonnes (2016: 863,077 tonnes);
-- Ore hauled of 980,849 tonnes (2016: 817,506); and
-- Ore processed of 968,080 tonnes (2016: 874,983).
With record throughput and improved grades, record amounts of
zinc and gold in concentrate were produced in 2017:
-- Zinc metal in concentrate produced of 43,403 tonnes (2016: 31,948 tonnes);
-- Gold metal in concentrate produced of 20,489 ozs (2016: 12,654 ozs);
-- Silver metal in concentrate produced of 394,117 ozs (2016: 310,611 ozs); and
-- Lead metal in concentrate produced of 1,421 tonnes (2016: 1,439 tonnes).
Record turnover was achieved in 2017 with concentrate sales of
$132,644,000 (2016 $69,546,000), before royalties and resource
taxes.
Zinc metal in concentrate prices received were significantly
higher in 2017 than in 2016 with zinc metal in concentrate prices
received up 51.6%. This reflects higher market prices and a
tightening of concentrate supply in China.
In summary:
-- Zinc metal in concentrate sold of 43,342 tonnes (2016: 31,864 tonnes);
-- Gold in concentrate sold of 20,489 ozs (2016: 12,654 ozs);
-- Silver in concentrate sold of 394,117 ozs (2016: 310,611 ozs); and
-- Lead metal in concentrate sold of 1,421 tonnes (2016: 1,439 tonnes).
Cost of sales in 2017 of $44,360,000 were up on that incurred in
2016 of $37,851,000. This reflects increased tonnage mined, hauled
and processed. Additional costs were incurred extracting ore from
greater depth and backfilling waste material and tailings to
minimise surface storage of tailings.
Administration expenses (including those of the Caijiaying Mine
site) have risen from $13,218,000 in 2016 to $18,524,000 in 2017.
This increase arises mainly from increased service fees to the
Group's Chinese partners, Guoxin, up from $1,983,000 in 2016 to
$5,900,000 in 2017, representing 11.2% of Hebei Hua Ao's profits.
Administration costs outside of China in 2017 were in line with
2016. Administration costs within China have increased with higher
fees and costs in dealing with stricter environmental, health and
safety regulations and in applying for the mining licence over Zone
II.
With the repayment of all bank loans during the year, interest
costs fell from $4,286,000 in 2016 to $2,219,000 in 2017.
Foreign exchange gains of $87,000 (2016 losses $532,000) were
recorded in 2017 due to an increase in the value of the
Renminbi.
Following the latest upgrade to the processing facilities,
losses on the disposal of redundant plant and equipment of
$1,067,000 were recorded in 2017 compared to $224,000 in 2016.
Income taxes of $17,556,000 (2016 $4,468,000) were charged in
2016. This includes a deferred taxation provision of $95,000 (2016
$151,000).
Basic earnings per share in 2017 was 24.63 cents (2016 3.3
cents) and diluted earnings per share was 22.97 cents (2016 3.26
cents).
Attributable net assets per share at 31st December 2017 was 113
cents (2016 80 cents).
In anticipation of funds needed for the development of the Zone
II area at Caijiaying, the directors do not recommend the payment
of a dividend at this time.
Chairman's Statement:
It is almost impossible to downplay what has been achieved in
2017. The Company achieved record revenues (up 91% from 2016),
record operating profit (up 319% from 2016), record profit before
tax (up 486% from 2016), record profit after tax (up 633% from
2016), record earnings per share (up 645% from 2016), record ore
mined, record ore hauled, record ore processed, record zinc
production (up 26% from 2016) and record gold production (up 62%
from 2016). In essence, the Company broke every record it had ever
previously set.
Specifically, Griffin and its subsidiaries (together the
"Group") recorded revenues of $126,657,000, an operating profit of
$63,773,000, profit before tax of $60,877,000, profit after tax of
$43,321,000 and earnings per share of 24.6 cents.
Operationally, record ore mined amounted to 920,168 tonnes,
hauled 980,849 tonnes and processed 968,080 tonnes. This led to
record zinc metal in concentrate produced of 43,403 tonnes and gold
metal in concentrate produced of 20,489 ounces.
The cash generated from these outstanding results enabled all
bank loans to be repaid and leaves the Company debt free with $26.5
million in cash on hand at year end.
In addition, although the share price of a company can often be
a very poor indicator of the true value of that entity, it is
pleasing for the shareholders that from the first to the last
trading day in 2017, the share price of the Company moved from 53p
to 116.5p, a rise of 120%, a trend which has continued unabated
into 2018.
The Caijiaying Mine continues to be modernised with a second
electric-hydraulic development drill, second remote loader and a
mechanized rock bolting machine delivered during the year. A new 20
tonne haulage truck was trialled recently and will join the
underground haulage fleet in the near future.
At camp, the Company completed and settled a new accommodation
block for an additional 90 people allowing all of Hebei Hua Ao's
staff to now be housed on site and thereby obtaining all the
benefits of existing sporting, social and transportation amenities.
A new sewage plant was also commissioned at camp to continue with
the Company's zero tolerance of any environmental discharge from
operations or from staff at the Caijiaying Mine site.
The only negative for the year, and for the past number of
years, is the continuing inability to secure the new mining licence
for the greater Zone II area. This is particularly frustrating
considering the processing facilities have been completed to accept
the doubling of ore capacity and the second portal almost completed
to allow more efficient ore transportation to the mill. The
economics of the Caijiaying Mine will be, yet again, significantly
improved when Zone II ore can be mined and processed. I will not
venture an opinion when the new mining licence will be granted,
particularly in light of my previous predictions, but rest assured
that every possible effort is being made to complete this process
as soon as possible.
Despite all of the success outlined above, the Company refuses
to rest on its laurels and continues to move on a number of fronts
to increase shareholder value including rigorously exploring at its
current mining operations (Zone III), adjacent to its current
mining operations (Zone VIII), regionally (Sangongdi and
Shitouhulun), outside Hebei Province (Inner Mongolia) and searching
internationally for projects or companies that meet the
predetermined rates of return that the Company has set,
particularly in light of the extraordinary financial performance
and life of the Caijiaying Mine.
Further information
Griffin Mining Limited
Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772
Roger Goodwin - Finance Director
Panmure Gordon (UK) Limited Telephone: +44 (0) 20 7886 2500
Dominic Morley
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
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No.596/2014.
Griffin Mining Limited
Summarised Consolidated Income Statement
For the year ended 31 December 2017
(expressed in thousands US dollars)
2017 2016
$000 $000
Revenue 126,657 66,270
Cost of sales (44,360) (37,851)
Gross profit 82,297 28,419
Administration expenses (18,524) (13,218)
Profit from operations 63,773 15,201
Losses on disposal of plant and equipment (1,067) (224)
Foreign exchange profits / (losses) 87 (532)
Finance income 143 178
Finance costs (2,219) (4,286)
Other income 160 45
Profit before tax 60,877 10,382
Income tax expense (17,556) (4,468)
Profit after tax 43,321 5,914
======== ========
Basic earnings per share (cents) 24.63 3.30
======== ========
Diluted earnings per share (cents) 22.97 3.26
======== ========
Griffin Mining Limited
Summarised Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
(expressed in thousands US dollars)
2017 2016
$000 $000
Profit for the year 43,321 5,914
-------- ---------
Other comprehensive income that
will be reclassified to profit
or loss
Exchange differences on translating
foreign operations 5,004 (3,299)
Other comprehensive income for
the period, net of tax 5,004 (3,299)
-------- ---------
Total comprehensive income for
the period 48,325 2,615
======== =========
Griffin Mining Limited
Summarised Consolidated Statement of Financial Position
As at 31 December 2017
(expressed in thousands US dollars)
2017 2016
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 214,695 204,491
Intangible assets - exploration interests 2,035 1,792
--------
216,730 206,283
-------- --------
Current assets
Inventories 5,868 6,148
Receivables and other current assets 4,374 8,232
Cash and cash equivalents 26,518 13,218
-------- --------
36,760 27,598
-------- --------
Total assets 253,490 233,881
======== ========
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital 1,700 1,790
Share premium 67,295 71,310
Contributing surplus 3,690 3,690
Share based payments 2,072 2,072
Shares held in treasury - (3,875)
Chinese statutory re-investment reserve 2,204 1,583
Other reserve on acquisition of non
controlling interests (29,346) (29,346)
Foreign exchange reserve 9,777 4,871
Profit and loss reserve 133,972 91,174
-------- --------
Total equity attributable to equity
holders of the parent 191,364 143,269
-------- --------
Non-current liabilities
Long-term provisions 2,418 2,277
Deferred taxation 2,865 2,607
Finance lease 712 3,791
-------- --------
5,995 8,675
-------- --------
Current liabilities
Trade and other payables 52,437 34,466
Finance lease 3,694 2,783
Bank loans - 44,688
-------- --------
Total current liabilities 56,131 81,937
--------
Total equities and liabilities 253,490 233,881
======== ========
Attributable net asset value per share
to equity holders of parent $1.13 $0.80
Griffin Mining Limited
Summarised Consolidated Statement of Changes in Equity.
For the year ended 31 December 2017
(expressed in thousands US dollars)
Share Share Contributing Share Shares Chinese Other Foreign Profit Total
Capital premium surplus Based held re reserve Exchange and attributable
in investment on loss to
Payments Treasury Reserve acquisition Reserve Reserve equity
of holders
non
controlling of parent
Interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
At 31st
December
2015 1,790 71,310 3,690 1,363 (3,875) 1,595 (29,346) 8,068 85,350 139,945
Regulatory
transfer
for future
investment - - - - - 90 - - (90) -
Cost of share
based
payments - - - 709 - - - - - 709
Transaction
with owners - - - 709 - 90 - - (90) 709
------- ------- ------------ -------- --------- ---------- ----------- -------- ------- ------------
Profit for the
year - - - - - - - - 5,914 5,914
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - (102) - (3,197) - (3,299)
------- ------- ------------ -------- --------- ---------- ----------- -------- ------- ------------
Total
comprehensive
income - - - - - (102) - (3,197) 5,914 2,615
------- ------- ------------ -------- --------- ---------- ----------- -------- ------- ------------
At 31st
December
2016 1,790 71,310 3,690 2,072 (3,875) 1,583 (29,346) 4,871 91,174 143,269
Regulatory
transfer
for future
investment - - - - - 523 - - (523) -
Purchase of
shares
held in
treasury - - - - (230) - - - (230)
Cancellation
of shares
held in
treasury (90) (4,015) - - 4,105 - - - - -
Transaction
with owners (90) (4,015) - - 3,875 523 - - (523) (230)
------- ------- ------------ -------- --------- ---------- ----------- -------- ------- ------------
Profit for the
year - - - - - - - - 43,321 43,321
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - 98 - 4,906 - 5,004
------- ------- ------------ -------- --------- ---------- ----------- -------- ------- ------------
Total
comprehensive
income - - - - - 98 - 4,906 43,321 48,325
------- ------- ------------ -------- --------- ---------- ----------- -------- ------- ------------
At 31st
December
2017 1,700 67,295 3,690 2,072 - 2,204 (29,346) 9,777 133,972 191,364
======= ======= ============ ======== ========= ========== =========== ======== ======= ============
Griffin Mining Limited
Summarised Consolidated Cash Flow Statement
For the year ended 31 December 2017
(expressed in thousands US dollars)
2017 2016
$000 $000
Net cash flows from operating activities
Profit before taxation 60,877 10,382
Foreign exchange (profits) / losses (87) 532
Finance income (143) (178)
Finance costs 2,219 4,286
Adjustment in respect of share based
payments - 709
Depreciation, depletion and amortisation 9,783 8,526
Losses on disposal of equipment 1,067 224
Decrease in inventories 280 1,034
Decrease / (increase) in receivables
and other current assets 3,928 (6,251)
Increase in trade and other payables 7,621 3,280
Taxation paid (8,108) (641)
-------- --------
Net cash inflow from operating activities 77,437 21,903
-------- --------
Cash flows from investing activities
Interest received 143 178
Proceeds on disposal of equipment 184 -
Payments to acquire - mineral interests (9,330) (7,361)
Payments to acquire - plant and equipment (4,125) (3,776)
Payments to acquire - office equipment (2) (102)
Payments to acquire intangible fixed
assets - exploration interests (128) (43)
--------
Net cash outflow from investing activities (13,258) (11,104)
-------- --------
Cash flows from financing activities
Purchase of shares for treasury (230) -
Interest paid (1,773) (3,684)
Finance lease repayments (2,943) (2,935)
Repayment of bank loans (46,024) (14,891)
-------- --------
Net cash outflow from financing activities (50,970) (21,510)
-------- --------
Increase / (decrease) in cash and
cash equivalents 13,209 (10,711)
Cash and cash equivalents at the beginning
of the year 13,218 24,062
Effects of exchange rates 91 (133)
--------
Cash and cash equivalents at the end
of the year 26,518 13,218
-------- --------
Cash and cash equivalents comprise
bank deposits.
Bank deposits 26,518 13,218
======== ========
Included within net cash flows of $13,209,000 (2016 $10,711,000)
are foreign exchange gains of $87,000 (2016 losses $532,000) which
have been treated as realised.
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 435 of the UK Companies Act 2006. The
summarised consolidated statement of financial position at 31st
December 2017 and the summarised consolidated income statement,
summarised statement of comprehensive income, 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 audited 2017 statutory financial statements.
3. The annual report and accounts for 2017 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, 8(th) Floor, 54 Jermyn Street, London, SW1Y 6LX.
4. The Group has one business segment, the Caijiaying zinc gold
mine in the People's Republic of China. All sales and costs of
sales in 2017 and 2016 were derived from the Caijiaying zinc gold
mine.
2017 2016
$000 $000
REVENUES
China 126,657 66,270
========= =========
Zinc concentrate sales 99,886 48,430
Lead and precious metals concentrate
sales 32,758 21,116
Royalties and resource taxes (5,987) (3,276)
--------- ---------
126,657 66,270
========= =========
COST OF SALES
China (44,360) (37,851)
========= =========
NET OPERATING EXPENSES
China (13,819) (8,410)
Australia (434) (474)
European Union (4,271) (4,334)
--------- ---------
(18,524) (13,218)
========= =========
All revenues, cost of sales and operating expenses charged to
profit relate to continuing operations.
2017 2016
$000 $000
TOTAL ASSETS
China 250,809 231,894
Australia 641 499
European Union 2,040 1,488
-------- --------
253,490 233,881
======== ========
CAPITAL EXPITURE
China 13,455 11,137
European Union 2 102
-------- --------
13,457 11,239
======== ========
Notes (continued):
5. Finance Income
2017 2016
$000 $000
Interest on bank deposits 143 178
===== =====
6. Finance Costs
2017 2016
$000 $000
Interest payable on short term bank
loans 447 3,684
Finance lease interest 1,772 602
------ ------
2,219 4,286
====== ======
7. Other Income
2017 2016
$000 $000
Scrap and sundry other sales 160 45
===== =====
8. Income tax expense
2017 2016
$000 $000
Profit for the year before tax 60,877 10,382
------- -------
Expected tax expense at a standard
rate of PRC income tax of 25% (2016
25%) 15,219 2,596
Adjustment for tax exempt items:
- Income and expenses outside the PRC
not subject to tax 854 843
Adjustments for short term timing differences:
- In respect of accounting differences (490) (545)
- Other 162 135
Adjustments for permanent timing differences
re prior year costs disallowed - 573
Adjustments for permanent timing differences
other 1,678 695
Withholding tax on intercompany dividends
and charges 38 20
Current taxation expense 17,461 4,317
------- -------
Deferred taxation expense
Origination and reversal of temporary
timing differences 95 151
95 151
------- -------
Total tax expense 17,556 4,468
======= =======
The parent company is not resident in the United Kingdom for
taxation purposes. Hebei Hua-Ao paid income tax in the PRC at a
rate of 25% in 2017 (25% in 2016) based upon the profits calculated
under Chinese generally accepted accounting principles (Chinese
"GAAP").
8. The calculation of the basic loss / earnings per share is
based on the losses / earnings attributable to ordinary
shareholders divided by the weighted average number of shares in
issue during the year. The calculation of diluted losses / earnings
per share is based on the basic losses / earnings per share on the
assumed conversion of all dilutive options and other dilutive
potential ordinary shares.
Notes (continued):
Reconciliation of the loss / earnings and weighted average
number of shares used in the calculations are set out below:
2017 2015
Earnings Weighted Per Loss Weighted Per
Average share Average share
$000 number amount number amount
of shares (cents) $000 of shares (cents)
Basic earnings
per share
Earnings
attributable
to ordinary
shareholders 43,321 175,894,007 24.63 5,914 179,091,830 3.30
Dilutive effect
of securities
Options - 12,703,367 (1.66) - 2,248,862 (0.04)
--------- ------------- --------- ------- ------------- ---------
Diluted earnings
per share 43,321 188,597,374 22.97 5,914 181,340,692 3.26
========= ============= ========= ======= ============= =========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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