TIDMGFM
RNS Number : 4716X
Griffin Mining Ld
30 April 2019
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
30(th) April 2019
Results for 2018 and Annual Report and Accounts
Griffin Mining Limited ("Griffin" or the "Company") has today
published its annual report and financial statements for the year
ended 31 December 2018 which are available on the Company's web
site wwww.griffinmining.com.
In 2018, the Company and its subsidiaries (together the "Group")
recorded;
-- Revenues of $99,067,000 (2017: $126,657,000);
-- Operating profits of $35,555,000 (2017: $63,773,000);
-- Profit before tax of $34,798,000 (2017: $60,877,000);
-- Profit after tax of $25,477,000 (2017: $43,321,000); and
-- Earnings of 14.83 cents per share (2017: 24.63 cents).
Profits were impacted by falling zinc metal prices, higher
treatment charges and lower concentrate production.
Zinc metal in concentrate sales before royalties and resource
taxes in 2018 amounted to $78,821,000 (2017: $99,886,000). Lead and
precious metal in concentrate sales amounted to $24,920,000 (2017:
$32,758,000).
In 2018, metal in concentrate sales were:
-- Zinc 36,672 tonnes (2017: 43,342 tonnes);
-- Gold 16,206 ounces (2017: 20,489 ounces);
-- Silver 279,632 ounces (2017: 310,611 ounces); and
-- Lead 1,027 tonnes (2017: 1,421 tonnes).
Average prices achieved in 2018 were:
-- Zinc metal per tonne of $2,149 (2017: $2,305);
-- Gold metal per ounce of $1,173 (2017: $1,183);
-- Silver metal per ounce of $12.60 (2017: $13.50); and
-- Lead metal per tonne of $2,250 (2017: $2,242).
Cost of sales of $45,798,000 in 2018 were up 3.2% on that
incurred in 2017 of $44,360,000. This increase may be attributed to
inflation in China with consequent wage increases, higher costs
incurred extracting ore from greater depth, higher costs incurred
backfilling waste material and tailings to minimise surface storage
of tailings, higher power charges and changes in the recoverability
of Chinese VAT inputs.
Administration expenses (including those of the Caijiaying Mine)
have fallen 4.4% to $17,714,000 from $18,524,000 in 2017. This
reduction was mainly due to lower service fees paid to Hebei Hua
Ao's Chinese shareholder, Zhangjiakou Yuanrun Enterprise Management
Consulting Services Company Limited, of $3,732,000 in 2018 compared
with $5,900,000 in 2017. Otherwise, administration costs were up
reflecting inflationary pressures in China, expenses incurred in
applying for the new mining licence over Zone II and the expansion
of China Zinc Limited activities in investigating potential
ventures elsewhere in China. Central Company costs incurred outside
China have been reduced.
Foreign exchange gains of $42,000 (2017: $87,000) were recorded
in 2018.
Following the repayment of all bank loans in 2017, bank deposit
interest of $223,000 (2017: $143,000) was received.
Income taxes of $9,321,000 (2017: $17,556,000) have been charged
in 2018. This includes a deferred taxation credit of $343,000
(2017: charge $95,000).
Basic earnings in 2018 were 14.83 cents per share (2017: 24.63
cents) and diluted earnings were 13.35 cents per share (2017: 22.97
cents).
Cash generated from operations have been used to reduce
liabilities resulting in net cash flow from operating activities of
$20,439,000, $16,884,000 of which has been expended in further
development of the Caijiaying Mine including equipment and
exploration. In addition, 540,000 shares in the Company were bought
in at a cost of $917,000.
Attributable net assets per share at 31st December 2018 was
$1.22 (2017: $1.13).
Chairman's Statement:
By the measure of almost any other mining company, 2018 would be
considered a monumentally, outstanding success. $3 billion of in
situ metal was added to the resource base, an operating profit of
$36 million and a net profit after tax of $25.5 million was
generated, major above and below ground capital developments were
undertaken to position the Caijiaying Mine operationally for the
next 10 years and all this whilst remaining debt free and
self-funding from operations.
In terms of long term value added to the Company, over 3 million
tonnes of zinc metal and 1.16 million ounces of gold have been
defined by the Company since the start of mining in 2005
emphasizing the success of the Company's exploration efforts and
the extraordinary size and nature of the orebody contained within
the Caijiaying Mine.
Nevertheless, and reversing a well known proverb, perhaps every
silver lining has a cloud, with the mining licence over Zone II
still failing to be granted. In effect, this means constructed and
commissioned infrastructure lies idle waiting for this new source
of ore to be mined and processed to substantially increase the
Company's metal production. I am not sure I have any remaining
credibility in crystal ball gazing and my days as a seer may well
and truly be over, but I sincerely believe the new mining licence
will be granted in 2019.
The stand-out achievement of the year was the Company increasing
its resource base by 78.5%, all from Zone III, including adding
807,000 tonnes of zinc metal, 311,000 ounces of gold and 13.6
million ounces of silver. Modelling of the other "zones" at the
Caijiaying Mine has been progressing well with all concerned very
excited on the possible size of the revised Zone II resource model
as well as the maiden estimate for Zone VIII, both expected by the
end of the northern summer.
Financially, the Company and its subsidiaries had a good year in
light of falling zinc metal prices, higher treatment charges and
lower concentrate production. Revenues of $99 million were recorded
with an Operating Profit of $35.6 million, Profit before Tax of
$34.8 million, Profit after Tax of $25.5 million and Earnings of
14.83 cents per share.
Operationally, ore mined amounted to 872,069 tonnes whilst ore
processed was 930,472 tonnes amounting to metal in concentrate
produced of 37,112 tonnes of zinc, 16,230 ounces of gold, 280,712
ounces of silver and 1,030 tonnes of lead.
With the development of Zone II awaiting the new mining licence,
the decision was taken to institute a programme to further
modernise the Caijiaying Mine. Underground development work was
primarily focused on developing future stoping horizons between the
1175 metre and 1000 metre level, a much larger development than
previously undertaken at the Caijiaying Mine. A twin boom electric
hydraulic development drill and three 20 tonne, fully enclosed
cabin, haulage trucks were added to the fleet by the contractor
allowing more material being hauled from deeper in the Caijiaying
Mine with less truck movements and greater reliability. Further
fleet upgrades continue on an ongoing basis.
As a responsible citizen of both China and Planet Earth, the
Company continues to maintain and further implement best practices
regarding the protection of the environment and has invested
heavily in the local community. The Company believes these to be
moral, humane, community and planetary obligations. I would urge
you to read of our practices and contributions in this Annual
Report and obtain the sense of pride from the contributions the
Company has made in this area.
In spite of all the above achievements, the Company does not
rest on its laurels. In the words of Mark Twain, "To stand still is
to fall behind." Firstly, it continues to explore areas surrounding
the Caijiaying Mine, including the prospective Sangongdi area. The
scope of that work can be deemed in the Exploration section of this
Annual Report. Secondly, in 2018, the Company expanded the scope
and activities of its wholly owned subsidiary China Zinc Limited to
create a data base of the geology, exploration and mining
activities in China to search for potential acquisitions of base
metals projects that meet the Company's pre-set economic criteria.
Any such projects found not to meet this criteria will be either
ignored, or if seemingly of value, sold, joint ventured or offered
in a separate vehicle to existing Griffin shareholders. Thirdly,
the Company continues to investigate potential mining projects
located outside of China on the same objective investment basis as
historically has been the case.
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 2018
(expressed in thousands US dollars)
2018 2017
Audited Audited
$000 $000
Revenue 99,067 126,657
Cost of sales (45,798) (44,360)
Gross profit 53,269 82,297
Administration expenses (17,714) (18,524)
Profit from operations 35,555 63,773
Losses on disposal of plant and equipment (939) (1,067)
Foreign exchange gains 42 87
Finance income 223 143
Finance costs (283) (2,219)
Other income 200 160
Profit before tax 34,798 60,877
Income tax expense (9,321) (17,556)
Profit for the year 25,477 43,321
======== ========
Basic earnings per share (cents) 14.83 24.63
======== ========
Diluted earnings per share (cents) 13.35 22.97
======== ========
Griffin Mining Limited
Summarised Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018
(expressed in thousands US dollars)
2018 2017
Audited Audited
$000 $000
Profit for the year 25,477 43,321
--------- --------
Other comprehensive (expenses) / income
that will be reclassified to profit or loss
Exchange differences on translating foreign
operations (5,856) 5,004
Other comprehensive (expenses) / income
for the year, net of tax (5,856) 5,004
--------- --------
Total comprehensive income for the year 19,621 48,325
========= ========
Griffin Mining Limited
Summarised Consolidated Statement of Financial Position
As at 31 December 2018
(expressed in thousands US dollars)
2018 2017
Audited Audited
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 213,140 214,695
Intangible assets - exploration interests 2,016 2,035
--------
215,156 216,730
-------- --------
Current assets
Inventories 4,951 5,868
Receivables and other current assets 2,819 4,374
Cash and cash equivalents 28,452 26,518
-------- --------
36,222 36,760
-------- --------
Total assets 251,378 253,490
======== ========
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 1,727 1,700
Share premium 68,442 67,295
Contributing surplus 3,690 3,690
Share based payments 2,072 2,072
Shares held in treasury (917) -
Chinese statutory re-investment reserve 2,386 2,204
Other reserve on acquisition of non controlling
interests (29,346) (29,346)
Foreign exchange reserve 4,027 9,777
Profit and loss reserve 159,161 133,972
-------- --------
Total equity attributable to equity holders of
the parent 211,242 191,364
-------- --------
Non-current liabilities
Long-term provisions 2,302 2,418
Deferred taxation 2,393 2,865
Finance lease 258 712
-------- --------
4,953 5,995
-------- --------
Current liabilities
Trade and other payables 33,632 52,437
Finance lease 1,551 3,694
Total current liabilities 35,183 56,131
--------
Total equities and liabilities 251,378 253,490
======== ========
Attributable net asset value per share to equity
holders of parent $1.22 $1.13
Griffin Mining Limited
Summarised Consolidated Statement of Changes in Equity.
For the year ended 31 December 2018
(expressed in thousands US dollars)
Share Share Contributing Share Shares Chinese Other Foreign Profit Total
Capital premium surplus Based held in Re-investment reserve on Exchange and attributable
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 31
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 31
December
2017 1,700 67,295 3,690 2,072 - 2,204 (29,346) 9,777 133,972 191,364
Regulatory
transfer for
future
investment - - - - - 288 (288) -
Issue of
shares on
exercise
of options 27 1,147 - - - - - - - 1,174
Purchase of
shares held
in
treasury - - - - (917) - - - - (917)
Transaction
with owners 27 1,147 - - (917) 288 - - (288) 257
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Profit for
the year - - - - - - - - 25,477 25,477
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - (106) - (5,750) - (5,856)
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Total
comprehensive
income - - - - - (106) - (5,750) 25,477 19,621
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
At 31
December
2018 1,727 68,442 3,690 2,072 (917) 2,386 (29,346) 4,027 159,161 211,242
======= ======= ============ ======== ========= ============= =============== ======== ======= ============
Griffin Mining Limited
Summarised Consolidated Cash Flow Statement
For the year ended 31 December 2018
(expressed in thousands US dollars)
2018 2017
Audited Audited
$000 $000
Net cash flows from operating activities
Profit before taxation 34,798 60,877
Foreign exchange gains (42) (87)
Finance income (223) (143)
Finance costs 283 2,219
Depreciation, depletion and amortisation 10,328 9,783
Losses on disposal of equipment 939 1,067
Decrease in inventories 917 280
(Increase) / decrease in receivables and other
current assets (1,059) 3,928
(Decrease) / increase in trade and other payables (12,917) 7,621
Taxation paid (12,585) (8,108)
-------- --------
Net cash inflow from operating activities 20,439 77,437
-------- --------
Cash flows from investing activities
Interest received 223 143
Proceeds on disposal of equipment 351 184
Payments to acquire - mineral interests (10,669) (9,330)
Payments to acquire - plant and equipment (6,134) (4,125)
Payments to acquire - office equipment - (2)
Payments to acquire intangible fixed assets -
exploration interests (81) (128)
--------
Net cash outflow from investing activities (16,310) (13,258)
-------- --------
Cash flows from financing activities
Issue of ordinary shares on exercise of options 1,174 -
Purchase of shares for treasury (917) (230)
Interest paid - (1,773)
Finance lease repayments (2,728) (2,943)
Repayment of bank loans - (46,024)
-------- --------
Net cash outflow from financing activities (2,471) (50,970)
-------- --------
Increase in cash and cash equivalents 1,658 13,209
Cash and cash equivalents at the beginning of
the year 26,518 13,218
Effects of exchange rates 276 91
--------
Cash and cash equivalents at the end of the year 28,452 26,518
-------- --------
Cash and cash equivalents comprise bank deposits.
Bank deposits 28,452 26,518
======== ========
Included within net cash flows of $1,658,000 (2017 $13,209,000)
are foreign exchange gains of $42,000 (2017 gains $87,000) 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 financial statements of the Company.
2. The summary financial statements set out above do not
constitute statutory financial statements 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 31 December 2018 and the Summarised
Consolidated Income Statement, Summarised Consolidated Statement of
Comprehensive Income, Summarised 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
2018 statutory financial statements.
3. The annual report and accounts for 2018 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 ("PRC"). All sales and costs
of sales in 2018 and 2017 were derived from the Caijiaying zinc
gold mine.
2018 2017
$000 $000
REVENUES
China 99,067 126,657
======== ========
Zinc concentrate sales 78,821 99,886
Lead and precious metals concentrate sales 24,920 32,758
Royalties and resource taxes (4,674) (5,987)
-------- --------
99,067 126,657
======== ========
COST OF SALES
Mining costs 16,680 16,630
Haulage costs 8,374 8,130
Processing costs 10,423 9,681
Depreciation, depletion and amortisation (excluding
that in administration costs) 9,652 9,182
Stock movements 669 737
-------- --------
45,798 44,360
======== ========
ADMINISTRATION EXPENSES
China 13,122 13,819
Australia 442 434
European Union 4,150 4,271
-------- --------
17,714 18,524
======== ========
All revenues, cost of sales and operating expenses charged to
profit relate to continuing operations.
Notes (continued):
TOTAL ASSETS 2018 2017
$000 $000
China 245,505 250,809
Australia 924 641
UK / Bermuda 4,949 2,040
-------- --------
251,378 253,490
======== ========
CAPITAL EXPITURE 2018 2017
$000 $000
China 16,884 13,583
UK / Bermuda - 2
-------- --------
16,884 13,585
======== ========
FINANCE INCOME 2018 2017
$000 $000
Interest on bank deposits 223 143
===== =====
FINANCE COSTS 2018 2017
$000 $000
Interest payable on short term bank loans - 1,772
Finance lease interest 283 447
----- ------
283 2,219
===== ======
OTHER INCOME 2018 2017
$000 $000
Scrap and sundry other sales 200 160
===== =====
INCOME TAX EXPENSE 2018 2017
$000 $000
Profit for the year before tax 34,798 60,877
------- -------
Expected tax expense at a standard rate of PRC
income tax of 25% (2017 25%) 8,699 15,219
Adjustment for tax exempt items:
- Income and expenses outside the PRC not subject
to tax 629 854
Adjustments for short term timing differences:
- In respect of accounting differences (704) (490)
- Other - 162
Adjustments for permanent timing differences re (185) -
prior year adjustments
Adjustments for permanent timing differences other 1,154 1,678
Withholding tax on intercompany dividends and
charges 71 38
Current taxation expense 9,664 17,461
------- -------
Deferred taxation (credit) / expense
Correction of provision brought forward (674) -
Origination and reversal of temporary timing differences 331 95
(343) 95
------- -------
Total tax expense 9,321 17,556
======= =======
Notes (continued):
INCOME TAX EXPENSE (continued)
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 2018 (25% in 2017) based upon the profits calculated
under Chinese generally accepted accounting principles (Chinese
"GAAP").
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 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.
EARNINGS PER SHARE
Reconciliation of the earnings and weighted average number of
shares used in the calculations are set out below:
2018 2017
Earnings Weighted Per share Earnings Weighted Per share
Average amount Average amount
$000 number (cents) number (cents)
of shares $000 of shares
Basic earnings per
share
Earnings attributable
to ordinary
shareholders 25,477 171,842,166 14.83 43,321 175,894,007 24.63
Dilutive effect of
securities
Options - 16,494,541 (1.48) - 12,703,367 (1.66)
--------- ------------- ---------- --------- ------------- ----------
Diluted earnings
per share 25,477 188,336,707 13.35 43,321 188,597,374 22.97
========= ============= ========== ========= ============= ==========
Property, plant and equipment
Mineral Mill and Office furniture Total
Interests mobile mine & equipment
equipment
$000 $000 $000 $000
At 31 December 2016 158,144 46,238 109 204,491
Foreign exchange adjustments 4,976 2,805 - 7,781
Additions during the year 9,330 4,125 2 13,457
Disposals - (1,250) (1) (1,251)
Depreciation charge for
the year (5,404) (4,351) (28) (9,783)
----------- ------------- ----------------- ----------
At 31 December 2017 167,046 47,567 82 214,695
Foreign exchange adjustments (4,450) (2,291) - (6,741)
Additions during the year 10,669 6,134 - 16,803
Disposals - (1,289) - (1,289)
Depreciation charge for
the year (5,927) (4,374) (27) (10,328)
----------- ------------- ----------------- ----------
At 31 December 2018 167,338 45,747 55 213,140
=========== ============= ================= ==========
Property, plant and equipment (continued)
Mineral Mill and Office furniture Total
Interests mobile mine & equipment
equipment
$000 $000 $000 $000
At 31 December 2016
Cost 185,252 67,009 133 252,394
Accumulated depreciation (27,108) (20,771) (24) (47,903)
----------- ------------- ----------------- ----------
Net carrying amount 158,144 46,238 109 204,491
=========== ============= ================= ==========
At 31 December 2017
Cost 200,708 72,366 134 273,208
Accumulated depreciation (33,662) (24,799) (52) (58,513)
----------- ------------- ----------------- ----------
Net carrying amount 167,046 47,567 82 214,695
=========== ============= ================= ==========
At 31 December 2018
Cost 205,840 72,028 134 278,002
Accumulated depreciation (38,502) (26,281) (79) (64,862)
----------- ------------- ----------------- ----------
Net carrying amount 167,338 45,747 55 213,140
=========== ============= ================= ==========
Mineral interests comprise the Group's interest in the
Caijiaying ore bodies including costs on acquisition, plus
subsequent expenditure on licences, concessions, exploration,
appraisal and construction of the Caijiaying mine including
expenditure for the initial establishment of access to mineral
reserves, commissioning expenditure, and direct overhead expenses
prior to commencement of commercial production and together with
the end of life restoration costs.
Property, plant and equipment includes $15,034,000 (2017:
$13,170,000) of assets under construction yet to be
depreciated.
The office furniture and equipment disclosed above relates
solely to the fixed assets of the Company and China Zinc Pty
Limited.
During 2013 plant and equipment with a deemed value of
$12,880,000 were acquired under a finance lease, upon which
depreciation of $4,035,000 (2017: $3,428,000) has been provided. At
31 December 2018 the net carrying amount of this equipment was
$7,534,000 (2017: $8,723,000).
The Group assesses the carrying value of the mineral interests,
mill and mobile mine equipment at least annually, and more
frequently in the event of any indications of impairment, by
reference to discounted cash flow forecasts of future revenue and
expenditure for each business segment. These forecasts are based
upon both past and expected future performance, available resources
and expectations for future markets.
The directors have reassessed the net carrying value of
capitalised costs at 31 December 2018 and in estimating the
discounted future cash flows from the continuing operations at the
Caijiaying mine the following principal assumptions were made:
-- Future market prices for zinc of $2,700 per tonne and gold of $1,300 per troy ounce;
-- Future production from Zone III at Caijiaying to end of the
business licence in 2037 with ore mined and processed rising to 1.5
million tonnes of ore per annum;
-- Costs based upon past performance and that budgeted for 2019;
-- Discount interest rate of 10%; and
-- Continued maintenance and grant of applicable licences and permits.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR ILMPTMBTTBJL
(END) Dow Jones Newswires
April 30, 2019 02:00 ET (06:00 GMT)
Griffin Mining (LSE:GFM)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Griffin Mining (LSE:GFM)
Historical Stock Chart
Von Jul 2023 bis Jul 2024