TIDMGFM
RNS Number : 6695Y
Griffin Mining Limited
09 May 2023
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
9(th) May 2023
2022 Final Results
Griffin Mining Limited ("Griffin" or the "Company") has today
published its annual report and accounts for the year ended 31
December 2022 which will be available shortly on the Company's web
site wwww.griffinmining.com and will be posted to shareholders on
25 May 2023.
Despite operations being suspended by the Chinese authorities
for external events for nearly five months of 2022, the Company and
its subsidiaries (together the "Group") recorded;
-- Revenues of $94,397,000 (2021: $121,648,000);
-- Gross profit of $38,252,000 (2021: $58,424,000);
-- Operating profits of $15,625,000 (2021: $36,925,000);
-- Profit before tax of $15,272,000 (2021: $36,526,000);
-- Profit after tax of $7,704,000 (2021: $25,376,000); and
-- Basic earnings per share of 4.41 cents (2021: earnings per share 14.53 cents).
The results for 2022 were severely impacted by various
suspensions in operations for nearly five months of the year. First
quarter results were impacted by the enforced suspension of all
operations at the Caijiaying Mine for the Chinese Lunar New Year
holiday celebrations, the Winter Olympics and the subsequent Winter
Paralympics. Mining recommenced on the 23 March 2022 and processing
on the 25 March 2022. Operations were again suspended by the
Chinese authorities restricting the supply and use of explosives
for the duration of the Chinese Communist National Party Congress
from 22 September 2022 to 17 November 2022.
As a result of the suspensions in operations in 2022, Group
profits before tax decreased from $36,526,000 in 2021 to
$15,272,000 in 2022 with metal in concentrate production down on
that produced in 2021, whilst zinc, gold and lead metal in
concentrate prices achieved in 2022 were higher than those achieved
in 2021.
With the suspension in operations during 2022 mining, haulage,
and processing costs (cost of sales) were down 11.2%. This
reduction is less than the reduction in tonnes milled of 15.6% as a
result of fixed costs and higher depreciation charges as assets are
brought into use.
Operating (administration) costs excluding minority service
charges interests rose by 14.9%, reflecting inflationary costs in
China, additional fees on the appointment of new directors and the
resumption of travel.
TURNOVER
Turnover in 2022 of $94,397,000 was down $27,251,000 (22.4%) on
that achieved in 2021 of $121,648,000. This reflects zinc in
concentrate sales down $20,495,000 (21.1%) with 30,422 tonnes of
zinc metal in concentrate sold in 2022 compared with 41,949 tonnes
in 2021, a decrease of 27.5% with lower production, and average
zinc metal in concentrate prices received in 2022 of $2,513 per
tonne compared with $2,311 received in 2021 an increase of 8.7%.
This price increase reflects an increase in market prices with the
average LME zinc metal price of $3,488 per tonne in 2022 compared
with $3,007 in 2021 (an increase of 16.0%), mitigated by an
increase in smelter treatment charges with average smelter
treatment charges equating to 27.9% of the average LME zinc price
in 2022 compared with 23.1% in 2021.
Sales may be summarised as follows:
2022 2021
Zinc metal in concentrate revenue before royalties
($000s) 76,456 96,951
Lead metal in concentrate revenue before royalties
($000s) 2,052 2,216
Silver metal in concentrate revenue before
royalties ($000s) 3,829 5,326
Gold metal in concentrate revenue before royalties
($000s) 17,672 24,373
Royalties (5,612) (7,218)
Zinc metal in concentrate sold (tonnes) 30,422 41,949
Lead metal in concentrate sold (tonnes) 926 1,069
Silver in concentrate sold (ozs) 221,506 269,505
Gold in concentrate sold (ozs) 10,649 14,447
Average price per tonne received (zinc) ($) 2,513 2,311
Average price per tonne received (lead) ($) 2,216 2,074
Average price per oz received (silver) ($) 17.9 20.4
Average price received per oz (gold) ($) 1,814 1,748
Lead and precious metal in concentrate sales in 2022 of
$23,553,000 were down $8,362,000 (26.2%) on that
achieved in 2021 of $31,915,000. This reflects less lead and
precious metals sold, with lower production, with higher gold and
lead prices received, but lower silver prices received.
COST OF SALES
Total cost of sales in 2022 of $56,145,000 was down $7,079,000
(11.3%) on that incurred in 2021 of $63,224,000. In the main this
reflects less tonnes mined, hauled, and processed in 2022 than
2021. Operations in 2022 were impacted by the enforced suspensions
in operations for the Winter Olympics and PRC National Party
Congress. Whilst costs were down 11.2%, ore tonnes mined were down
12.2% and ore tonnes milled were down 15.6% with fixed costs
mitigating further cost reductions.
Mining costs in 2022 were down $2,221,000 (11.7%) on that in
2021 reflecting a 12.2% decrease in tonnes of ore mined, and
reduced operational development work. Some further fixed cost
savings were made in mine administration and other costs.
Haulage costs in 2022 were down $1,089,000 (9.5%) on that in
2021 reflecting a 14.3% decrease in tonnes of ore hauled and a
10.4% increase in average distances hauled from 2.97 km in 2021 to
3.28 km in 2022.
Processing costs in 2022 were down $2,364,000 (14.1%) on that
incurred 2021 with a 153,855 tonne (15.6%) reduction in ore
throughput and fixed costs mitigating a further reduction in costs.
There was a modest improvement in tailings being backfilled as
opposed to discharged to dry tailings of 48% compared with 42% in
2021.
Depreciation charges in 2022 were up $3,276,000 (22.6%) on that
incurred in 2021 as assets are brought into use and with an
additional charge to ensure all development costs capitalised,
including future development costs as estimated in the Life of Mine
Plan, are fully written off at the end of the Life of Mine.
PRODUCTION
Tonnes of ore processed in 2022 were down 15.6% on that in 2021.
With the zinc head grade down 0.41% in absolute terms on that in
2021, and recoveries down 0.1% on that in 2021, zinc metal in
concentrate production was down 23.5% on that in 2021.
With lower throughput, recoveries, and the gold grade down 0.11
g/t (15.7%) gold metal in concentrate
production in 2022 was down 29.8% on that produced in 2021. With
lower throughput and with the silver head grade down 0.88 g/t but
better recoveries silver metal in concentrate production in 2022
was down 16.7% on that produced in 2021.
OPERATING EXPENSES
Operating (administration) costs (excluding service fees to
Yuanrun) in 2022 of $20,228,000 were up $2,605,000 (14.9%) on that
incurred in 2021 of $17,623,000. Hebei Hua Ao's operating costs in
2022 were up $1,026,000 (8.4%) on that incurred in 2021 albeit this
is masked by a 3.4% fall in the value of the Renminbi. Renminbi
denominated administration costs have increased by 12.1%, primarily
on increased salaries and bonuses and ongoing increased
environmental and safety regulatory compliance costs. Griffin and
other subsidiary company costs were up with increased directors'
fees and bonuses, increased travel costs and increased directors'
and officers' liability insurance premiums. Service fees to Yuanrun
of $2,399,000 based on 11.2% of the profits of Hebei Hua Ao, as
adjusted for force majeure days when operations were suspended, has
been charged to profit and loss in 2022 compared with $3,876,000 in
2021.
PROFITS BEFORE TAX
After interest, foreign exchange adjustments and other income, a
profit before tax of $15,272,000 was recorded for 2022 compared to
$36,526,000 in 2021. The profit before tax in 2022 was after
charging / crediting:
-- FX losses of $387,000 (2021: losses $51,000);
-- Bank interest charges of $nil (2021: $309,000);
-- Finance lease interest $48,000 (2021: $11,000);
-- Interest in respect of rehabilitation provisions $87,000 (2021: $84,000);
-- Interest receipts of $369,000 (2021: $236,000);
-- Losses on the disposal of fixed assets of $404,000 (2021: $293,000);
-- Provisions against capitalised intangible assets (Hebei Sino Anglo) $nil (2021: $11,000); and
-- Other income of $204,000 (2021: $124,000).
TAXATION
Taxation of $7,568,000 has been provided for in 2022 (2021:
$11,150,000) being 25% of Hebei Hua Ao's profits under PRC GAAP
amounting to $6,931,000; withholding tax primarily of 5% on
intercompany dividends received of $803,000; UK corporation tax on
Griffin Mining (UK Services) Limited profits of $67,360 and a
deferred tax credit of $260,000.
CASH FLOW
Cash generated from operations of $15,734,000 (2021 $42,880,000)
have been used in further developing the
mine and facilities.
NET ASSETS
Attributable net assets per share at 31st December 2022 was
$1.40 (2021: $1.50).
Whilst the directors do not recommend the payment of a dividend
at this time, all possible alternatives will be considered in 2023
by the board of directors to either return excess cash to
shareholders, or increase shareholder value.
Chairman's Statement:
Taking into consideration that operations were suspended at the
Caijiaying Mine for a full 5 months due to, initially, the Chinese
Lunar New Year holiday celebrations, the Winter Olympics and the
Winter Paralympics and, subsequently, the Chinese Communist
National Party Congress, the Griffin Mining Limited ("Griffin" or
"the Company") was still able to generate its 18th continuous
operating profit for the year and its 17th net profit, whilst
currently holding $47 million in cash and no debt.
Of course, the most significant operational and financial
milestone of 2022 was the fulfilment of the Company's long held aim
of having the Caijiaying Mine run at an annualised production
throughput of 1.5 million tonnes per annum. This was achieved and
has been maintained since the restart of operations post the
Chinese Communist National Party Congress in November 2022. A
record of 136,000 tonnes of ore were processed in December 2022 and
the 1st quarter of 2023 was a record for the 1st quarter of any
year since the commissioning of the Caijiaying Mine in 2005. The
implications of this achievement cannot be underestimated and are
already being reflected in the financial results of the Company in
2023.
What makes these operational results even more remarkable is
that not one tonne of ore was sourced from Zone II. All ore was
obtained from the traditional mining area of Zone III. With the
approval by the Hebei Provincial Emergency Response Bureau of the
Mine Design for Zone II, including the expansion of the production
throughput rate, it can only portend what is yet to come when Zone
II is fully developed and slotted into the production profile.
The decision by the government of the People's Republic of China
("PRC") to allow the Covid-19 epidemic to be considered at an end
and the subsequent re-opening of the PRC's borders with the rest of
the world in late 2022, has allowed normal staffing and transport
to commence with materials and services becoming normalised.
Consequently, exploration has recommenced at the Caijiaying Mine
and the likelihood that exploration tenements will begin to be
issued in Hebei and the southern provinces of the PRC has become
more positive. This will include exploration below the 1000RL at
Zone III, the resource drilling in Zone II, further exploration at
Zones V & VIII, exploration drilling out to the far eastern
boundary of the Caijiaying Mine's mining licence area and the
possibility that virgin exploration tenements will be granted over
other areas.
With the growing cash balances of the Company and the increasing
cash generating capacity of the Caijiaying Mine, and with the
relatively recent addition of new directors, discussions have
intensified concerning the strategic direction of the Company's
future. These discussions have been, and will continue to be, wide
ranging and include dividends, share buybacks in various forms,
rationalisation and realisation of asset value, acquisitions and
joint or primary listings on other stock exchanges. It is expected
that these issues will take centre stage at board level this
year.
I am fully aware that the value of the Company's assets have not
yet been reflected in the share price and that it has taken an
inordinate amount of time to do so. Such is the nature of operating
at the infancy of mining in a foreign country, the dwindling
profile of the London Stock Market and the disappearance of the
retail investor as capital is squeezed in less and less hands,
mainly institutional, driven by Environment Sustainability and
Governance ("ESG") and other non-financial concerns.
Although the following may sound trite, I do not mean it to be.
Mining is facing a critical, if not insurmountable, supply problem.
The danger is real and frightening. The easily found deposits of
all metals have been discovered and generally mined over the past
100 years. The non-carbon future will require large amounts of
capital for advanced exploration techniques and drilling. The
projected time from exploration discovery to production, even in a
perfect world, is now estimated to be over 30 years and that does
not take into consideration native title and ESG issues. With just
one wind turbine requiring 4 tonnes of zinc, I remain convinced the
value of the Caijiaying Mine will be fully revealed in this surge
for metals.
As a result, and without knowing the Company's, my or anyone
else's future, it would be remiss of me not to thank everyone who
has been involved with the success of the Company. It has been a
unique, extraordinary and memorable experience. Billions of dollars
of metal value have been discovered and added to the Company's
resource inventory. The Company has been the sole trailblazer for
foreign mining in China. Extraordinary men have done extraordinary
things with little to no recognition by people who have no idea of
how to create value, how difficult it has traditionally been to
operate in China, mining and, sadly, the bonds of friendship.
I hesitate to name anyone individually for their contribution as
it immediately leads to forgetting someone and causing offence. But
I am going to repeat what I wrote last year, because I can't do
better this year that I will always be enormously grateful and
humbled by the contribution and camaraderie of the directors, whom
I'm proud to call "my friends", gave so freely, warmly, genuinely
and passionately. It made this impossible dream possible and
bearable and I shall always be so grateful.
With production running at an annualized 1.5 million tonne
throughput since November 2022 through to the date of this
statement, I predict 2023 will break all operating and financial
records for the Company including tonnes mined, hauled, processed
and zinc, gold, silver and lead produced. I look forward to being
able to deliver that news as the year progresses
About Griffin Mining Limited
Griffin Mining Limited's shares are quoted on the Alternative
Investment Market (AIM) of the London Stock Exchange (symbol GFM).
Griffin Mining Limited owns and operates in China, through its
88.8% owned Joint Venture stock company, the Caijiaying Zinc Gold
Mine, a profitable mine producing zinc, gold, silver, and lead
metals in concentrates. For more information, please visit the
Company's website www.griffinmining.com.
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
John Prior
Ailisa MacMaster
Berenberg Telephone: +44(0)20 3207 7800
Matthew Armitt
Jennifer Wyllie
Deltir Elezi
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014
Griffin Mining Limited
Summarised Consolidated Income Statement
For the year ended 31 December 2022
(expressed in thousands US dollars)
2022 2021
Audited Audited
$000 $000
Revenue 94,397 121,648
Cost of sales (56,145) (63,224)
Gross profit 38,252 58,424
Administration expenses (22,627) (21,499)
Operating Profit 15,625 36,925
Losses on disposal of plant and equipment (404) (293)
Provisions against intangible assets - (11)
Foreign exchange losses (387) (51)
Finance income 369 236
Finance costs (135) (404)
Other income 204 124
Profit before tax 15,272 36,526
Income tax expense (7,568) (11,150)
Profit for the year 7,704 25,376
======== ========
Basic earnings per share (cents) 4.41 14.53
======== ========
Diluted earnings per share (cents) 4.11 13.47
======== ========
Griffin Mining Limited
Summarised Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
(expressed in thousands US dollars)
2022 2021
Audited Audited
$000 $000
Profit for the year 7,704 25,376
---------- --------
Other comprehensive income / expenses that
will be reclassified to profit or loss
Exchange differences on translating foreign
operations (15,498) 3,336
Total other comprehensive (expense) / income
for the year, net of tax (15,498) 3,336
---------- --------
Total comprehensive (expense) / income
for the year (7,794) 28,712
========== ========
Griffin Mining Limited
Summarised Consolidated Statement of Financial Position
As at 31 December 2022
(expressed in thousands US dollars)
2022 2021
Audited Audited
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 258,041 275,296
Intangible assets - exploration interests 407 387
Other non- current assets 1,494 -
-------- --------
259,942 275,683
-------- --------
Current assets
Inventories 8,077 4,516
Receivables and other current assets 3,433 2,174
Cash and cash equivalents 34,138 38,159
-------- --------
45,648 44,849
-------- --------
Total assets 305,590 320,532
======== ========
EQUITY AND LIABILITIES
Equity attributable to equity holders of the
parent
Share capital 1,749 1,749
Share premium 69,334 69,334
Contributing surplus 3,690 3,690
Share based payments 168 2,072
Shares held in treasury (1,644) (1,644)
Chinese statutory re-investment reserve 2,992 2,896
Other reserve on acquisition of non-controlling
interests (29,346) (29,346)
Foreign exchange reserve (618) 14,635
Profit and loss reserve 199,140 199,190
-------- --------
Total equity attributable to equity holders of
the parent 245,465 262,576
-------- --------
Non-current liabilities
Other Payables 6,317 10,352
Long-term provisions 2,649 2,667
Deferred taxation 2,717 3,240
Finance leases 683 794
-------- --------
12,366 17,053
-------- --------
Current liabilities
Trade and other payables 47,590 40,726
Finance leases 169 177
Total current liabilities 47,759 40,903
-------- --------
Total equities and liabilities 305,590 320,532
======== ========
Attributable net asset value per share to equity
holders of parent 1.40 1.50
Griffin Mining Limited
Summarised Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
(expressed in thousands US dollars)
Share Share Contributing Share Shares Chinese Other Foreign Profit Total
Capital Premium surplus Based held in statutory reserve on exchange and attributable
payments treasury re-investment acquisition reserve loss to equity
reserve of reserve holders
non-controlling of parent
interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
At 1 January
2021 1,728 68,470 3,690 2,072 (917) 2,830 (29,346) 11,365 173,814 233,706
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Regulatory - -
transfer for
future
investment - - - - - - - -
Purchase of
shares held
in
treasury - - - - (727) - - - - (727)
Issue of
shares on
exercise
of options 21 864 - - - - - - - 885
Transaction
with owners 21 864 - - (727) - - - - 158
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Profit for
the year - - - - - - - - 25,376 25,376
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - 66 - 3,270 - 3,336
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Total
comprehensive
income - - - - - 66 - 3,270 25,376 28,712
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
At 31
December
2021 1,749 69,334 3,690 2,072 (1,644) 2,896 (29,346) 14,635 199,190 262,576
======= ======= ============ ======== ========= ============= =============== ======== ======= ============
Regulatory
transfer for
future
investment - - - - - 341 - - (341) -
Transfer on
surrender of
options - - - (1,904) - - - - (7,413) (9,317)
Transaction
with owners - - - (1,904) - 341 - - (7,754) (9,317)
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Profit for
the year - - - - - - - - 7,704 7,704
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - (245) - (15,253) - (15,498)
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
Total
comprehensive
income - - - - - (245) - (15,253) 7,704 (7,794)
------- ------- ------------ -------- --------- ------------- --------------- -------- ------- ------------
At 31
December
2022 1,749 69,334 3,690 168 (1,644) 2,992 (29,346) (618) 199,140 245,465
======= ======= ============ ======== ========= ============= =============== ======== ======= ============
Griffin Mining Limited
Summarised Consolidated Cash Flow Statement
For the year ended 31 December 2022
(expressed in thousands US dollars)
2022 2021
Audited Audited
$000 $000
Net cash flows from operating activities
Profit before tax 15,272 36,526
Foreign exchange losses 387 51
Finance income (369) (236)
Finance costs 135 404
Depreciation 19,590 16,530
Provisions against intangible assets - 11
Losses on disposal of equipment 404 293
Decrease / (increase) in inventories (3,561) 817
(Increase) / decrease in receivables and other
current assets (1,807) 4,936
(Decrease) / increase in trade and other payables (6,284) (2,871)
Tax paid (8,033) (13,581)
-------- --------
Net cash inflow from operating activities 15,734 42,880
-------- --------
Cash flows from investing activities
Interest received 369 236
(Costs) / proceeds on disposal of equipment (178) 1
Payments to acquire - mineral interests (7,348) (13,564)
Payments to acquire - plant and equipment (13,749) (6,365)
Payments to acquire office, office furniture &
equipment (6) -
Payments to acquire intangible fixed assets -
exploration interests (20) (73)
-------- --------
Net cash outflow from investing activities (20,932) (19,765)
-------- --------
Cash flows from financing activities
Issue of ordinary shares on exercise of options - 885
Interest paid - (309)
Purchase of shares for treasury - (727)
Bank loan advances - 15,500
Repayment of bank loans - (15,500)
Finance lease repayments including interest (167) (462)
Net cash outflow from financing activities (167) (613)
-------- --------
(Decrease) / increase in cash and cash equivalents (5,365) 22,502
Cash and cash equivalents at the beginning of
the year 38,159 16,435
Effects of exchange rates 1,344 (778)
-------- --------
Cash and cash equivalents at the end of the year 34,138 38,159
-------- --------
Cash and cash equivalents comprise bank deposits
Bank deposits 34,138 38,159
======== ========
Included within net cash flows of $5,365,000 (2021 $22,502,000)
are foreign exchange losses of $387,000 (2021:losses $51,000) which
have been treated as realised.
Notes to the Summarised Financial Statements:
This statement has been prepared using accounting policies and
presentation consistent with those applied in the preparation of
the statutory financial statements of the Group.
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 2022 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 2022 statutory
financial statements.
The annual report and accounts for 2022 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 and are available
on Griffin Mining Ltd's web site www.griffinmining.com
The Group has one business segment, the Caijiaying zinc gold
mine in the People's Republic of China. All revenues and costs of
sales in 2022 and 2021 were derived from the Caijiaying zinc gold
mine.
2022 2021
$000 $000
REVENUES
China 94,397 121,648
======== ========
Zinc concentrate sales 76,456 96,951
Lead and precious metals concentrate sales 23,553 31,915
Royalties and resource taxes (5,612) (7,218)
-------- --------
94,397 121,648
======== ========
COST OF SALES: CHINA
Mining costs 16,782 19,003
Haulage costs 10,377 11,466
Processing costs 14,390 16,754
Depreciation (excluding depreciation in administration
costs) 17,757 14,481
Stock movements (3,161) 1,520
-------- --------
56,145 63,224
======== ========
ADMINISTRATION EXPENSES
China 16,136 16,433
Australia 75 136
UK / Bermuda 6,416 4,930
-------- --------
22,627 21,499
======== ========
All revenues, cost of sales and operating expenses charged to
profit relate to continuing operations.
Notes (continued):
TOTAL ASSETS 2022 2021
$000 $000
China 299,810 312,026
Australia 1,044 1,011
UK / Bermuda 4,736 7,495
-------- --------
305,590 320,532
======== ========
CAPITAL EXPITURE 2022 2021
$000 $000
China 21,117 19,929
UK / Bermuda 6 963
-------- --------
21,123 20,892
======== ========
FINANCE INCOME 2022 2021
$000 $000
Interest on bank deposits 369 236
===== =====
FINANCE COSTS 2022 2021
$000 $000
Interest payable on short term bank loans - 309
Interest on rehabilitation provisions 87 84
Finance lease interest 48 11
----- -----
135 404
===== =====
OTHER INCOME 2022 2021
$000 $000
Scrap and sundry other sales 204 124
===== =====
Income Tax Expense
2022 2021
$000 $000
Profit for the year before tax 15,272 36,526
------- -------
Expected tax expense at a standard rate of PRC income
tax of 25% (2021: 25%) 3,818 9,132
Adjustment for tax exempt items :
- Income and expenses outside the PRC not subject
to tax 1,054 934
Adjustments for short term timing differences :
- In respect of accounting differences 1,862 890
- In respect of other timing differences - (4)
Adjustments for permanent timing differences other 291 372
Withholding tax on intercompany dividends and charges 803 21
Current taxation expense 7,828 11,345
------- -------
Deferred taxation (credit)
Origination and reversal of temporary timing differences (260) (195)
(260) (195)
------- -------
Total tax expense 7,568 11,150
======= =======
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 2022 (25% in 2021) based upon the profits calculated
under Chinese generally accepted accounting principles (Chinese
"GAAP").
EARNINGS PER SHARE
Reconciliation of the earnings and weighted average number of
shares used in the calculations are set out below:
2022 2021
Earnings Weighted Per Earnings Weighted Per share
Average share Average amount
$000 number amount number (cents)
of shares (cents) $000 of shares
Basic earnings per
share
Earnings attributable
to ordinary shareholders 7,704 174,892,894 4.41 25,376 174,653,602 14.53
Dilutive effect of
securities
Options - 12,384,576 (0.30) - 13,730,107 (1.06)
--------- -------------- --------- --------- -------------- ----------
Diluted earnings
per share 7,704 187,277,470 4.11 25,376 188,383,709 13.47
========= ============== ========= ========= ============== ==========
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.
Notes (continued):
Property, plant and equipment
Mineral Mill Offices Total
Interests and mobile furniture
mine equipment & equipment
At 1 January 2021 214,944 51,599 166 266,709
Foreign exchange adjustments 3,405 1,224 (2) 4,627
Transfer (773) 773 - -
Additions during the year 13,564 6,365 963 20,892
Change in estimate of mine
closure costs 327 - - 327
Release of rehabilitation
provision (435) - - (435)
Disposals - (294) - (294)
Depreciation charge for the
year (10,200) (6,180) (150) (16,530)
----------- ---------------- ------------- ----------
At 31 December 2021 220,832 53,487 977 275,296
=========== ================ ============= ==========
Foreign exchange adjustments (12,832) (4,836) 8 (17,660)
Transfer re rehabilitation
deposit (1,012) - - (1,012)
Additions during the year 7,348 13,749 6 21,103
Change in estimate of mine
closure costs 130 - - 130
Disposals - (226) - (226)
Depreciation charge for the
year (13,328) (6,104) (158) (19,590)
----------- ---------------- ------------- ----------
At 31 December 2022 201,138 56,070 833 258,041
=========== ================ ============= ==========
At 1 January 2021
Cost 267,763 90,173 583 358,519
Accumulated depreciation (52,819) (38,574) (417) (91,810)
----------- ---------------- ------------- ----------
Net carrying amount 214,944 51,599 166 266,709
=========== ================ ============= ==========
At 31 December 2021
Cost 285,471 97,910 1,544 384,925
Accumulated depreciation (64,639) (44,423) (567) (109,629)
----------- ---------------- ------------- ----------
Net carrying amount 220,832 53,487 977 275,296
=========== ================ ============= ==========
At 31 December 2022
Cost 275,250 101,763 1,106 378,119
Accumulated depreciation (74,112) (45,693) (273) (120,078)
----------- ---------------- ------------- ----------
Net carrying amount 201,138 56,070 833 258,041
=========== ================ ============= ==========
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.
Mill and mobile mine equipment include $14,007,000 (2021:
$5,795,000) of assets under construction yet to be depreciated.
Notes (continued):
Property, plant and equipment (continued)
The offices, furniture and equipment disclosed above relates
solely to the fixed assets, including leased offices, of Griffin
Mining (UK Services) Limited and China Zinc Pty Limited.
During 2013 plant and equipment with a deemed value of
$11,381,000, revalued in 2019 to $14,150,000, were acquired under a
finance lease, upon which depreciation of $8,601,000 (2021:
$8,132,000) has been provided. At 31 December 2022 the net carrying
amount of this equipment was $5,573,000 (2021: $7,351,000). In 2019
the London office lease was capitalised, and in November 2021
renewed. At 31 December 2022 the net carrying amount of this office
was $826,000 (2021: $963,000).
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. Management determined there
were no impairment indicators at 31 December 2022 (2021: nil).
However, as best practice and in response to an updated Life of
Mine Plan (LOM"), management have updated the impairment model.
In determining any indications of impairment in the carrying
value of the Caijiaying Mine the directors have reassessed the net
carrying value of capitalised costs at 31 December 2022 by
reference to the estimated mineral resources at Caijiaying that may
be extracted by 2050 (2021: 2056). While the current business
licence of Hebei Hua Ao expires in 2037, Hebei Hua Ao will be
converted to an equity joint venture company with an indefinite
life in order to comply with new PRC legislation. Accordingly, a
new LOM has been prepared by the Company, that indicates the
continued extraction of ore until 2050. In estimating the
discounted future cash flows from the continuing operations at the
Caijiaying mine the following principal assumptions have been
made:
-- Future market prices for zinc of $3,097 (2021: $3,000) per
tonne, gold of $1,800 (2021: $1,800) per troy ounce and silver of
$22.7 (2021: $22.5) per troy ounce;
-- Zinc treatment charges of 30% (2021: 30%) of market prices;
-- Extraction of measured and indicated resources of 40.4
million tonnes (2021: 50.3 million tonnes) to 2050 (2021: 2056)
with ore mined and processed rising to a maximum rate of 1.6
million tonnes (2021: 1.6 million) of ore per annum;
-- Operating costs, recoveries and payables based upon past
performance, that budgeted for 2023, and internal management
forecasts for future years;
-- Capital costs based upon that initially scheduled with
sustaining capital based on future scheduling;
-- Discount rate of 10% (2021: 10%);
-- Continued maintenance and grant of applicable licences and permits;
-- No significant impact as a result of climate change, earthquakes or other natural events; and
-- A Renminbi to US dollar exchange rate of 7Rmb to $1 (2021: 6.5Rmb to $1)
Sensitivities have been considered to assess the impact of
changes in key assumptions including, forecast metal prices,
foreign exchange and discount rates. If ongoing market prices for
zinc fall below $3,000 per tonne, with all other assumptions
unchanged, this would result in an incremental impairment of $2.5
million. A decrease in ongoing market prices for gold of 14% with
all other assumptions unchanged would result in the discounted cash
flows equating to the net carrying value. An increase in the
discount rate to 11.1% with all other assumptions unchanged would
result in the discounted cash flows equating to the net carrying
value.
Notes (continued):
Attributable net asset value per share to total equity per
holders of parent shares
The attributable net asset value / total equity per share has
been calculated from the consolidated net assets / total equity of
the Group at 31 December 2022 of $245,465,000 ($262,576,000 at 31
December 2021) divided by the number of ordinary shares in issue at
31 December 2022 of 174,892,894 (174,892,894 at 31 December
2021).
POST BALANCE SHEET EVENTS
As a rationalisation of the capital structure of the Company, on
30 January 2023 10,130,526 new ordinary shares in the Company were
issued for nil consideration pursuant to the offer to holders of
share purchase options for the purchase and cancellation of
outstanding options over 17,520,000 shares in the Company which
have subsequently been purchased and cancelled.
On 4 April 2023 a further 7,805,000 new ordinary shares in the
Company were issued as an incentive and to retain the services of
officers and other personnel of the Company, including 6,000,000
for the benefit of Mladen Ninkov, Chairman. These new ordinary
shares have been issued subject to agreements between each of the
said persons and the Company to confirm that the shares issued will
not be sold or otherwise transferred or disposed before 31st
December 2024 or earlier in the event of a transaction, subject to
malus, and a pro rata repurchase option in favour of the Company if
any holder of these shares leaves before 31 December 2024.
At 31 December 2022 there were no adjusting post balance sheet
events (2021: none)
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR GZGGKNRGGFZM
(END) Dow Jones Newswires
May 09, 2023 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
