TIDMGFM
RNS Number : 7321B
Griffin Mining Ld
06 April 2017
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
6th April 2017
PRELIMINARY RESULTS
Griffin Mining Limited ("Griffin" or the "Company") has today
published its preliminary results for the year ended 31st December
2016. Griffin and its subsidiaries (together the "Group")
recorded:
-- Revenues of $66,270,000 in 2016 (2015 $59,779,000);
-- Operating profit of $15,201,000 in 2016 (2015 $4,301,000);
-- Profit before tax of $10,382,000 in 2016 (2015 loss $940,000); and
-- Profit after tax of $5,914,000 in 2016 (2015 Loss $2,186,000)
Although record throughput was achieved in 2016, lower zinc,
lead and silver head grades caused by restricted mine access
following the suspension in mining operations, resulted in lower
zinc, lead and silver in concentrate being produced and sold than
in 2015. However, gold in concentrate production was up 22.1% on
2015 to a record 12,654 ozs.
Metal in concentrate prices received were significantly higher
in 2016 than in 2015 with zinc metal in concentrate prices received
of $1,520 per tonne up 27.6% on that received in 2015 of $1,191;
silver of $13.25 per oz was up 10.9% from that received in 2015 of
$11.95; and gold of $1,154 per oz up 10.6% on that received in 2015
of $1,043. This reflects higher market prices and a tightening of
concentrate supply in China.
In summary, metal in concentrate sales in 2016 were:
-- 31,864 tonnes zinc compared with 38,514 tonnes in 2015;
-- 1,439 tonnes lead compared with 1,800 tonnes in 2015;
-- 310,611 ozs silver compared with 346,711 ozs in 2015; and
-- 12,654 ozs gold compared with 10,406 ozs in 2015.
Cost of sales of $37,851,000 in 2016 was down on that incurred
in 2015 of $42,948,000. This reflects some economies of scale
following the installation of the new ball mill and non productive
costs during the suspension in mining in 2015.
874,983 tonnes of ore were processed in 2016 up 35,270 tonnes
(4.2%) from 2015 of 839,713 tonnes. Despite this increase in
throughput processing costs fell by 5.8% in 2016 with costs per
tonne of ore processed down by 9.6%.
817,506 tonnes of ore were mined in 2016 up 245,691 (43.0%) from
2015 of 571,815. Mining costs rose 4.8% which with increased
tonnage resulted in significantly lower costs per tonne of ore
mined. Much of this reduction in costs may be attributed to non
productive mine service costs during the suspension in mining
activities in the later part of 2015 with no ore extracted.
817,506 tonnes of ore were hauled in 2016 up 220,445 (36.9%)
from 2015 of 597,061. Haulage costs rose 26.5% which again with
increased tonnage resulted in significantly lower costs per tonne
of ore hauled. Much of this cost reduction reflects shorter
distances hauled from higher mine levels.
Administration expenses (including those of the Caijiaying site)
have risen 5.5% from $12,530,000 in 2015 to $13,218,000 in 2016.
Underlying administration costs have fallen 12.5% with lower share
based option charges, a fall in the value of the Renminbi and other
cost savings. However, service fees to Guoxin based upon on Hebei
Hua Ao's profits have increased from a credit of $307,000 in 2015
to a charge of $1,983,000 in 2016.
With a return to profitability, bank loans are being repaid as
quickly as possible resulting in finance charges falling from
$5,084,000 in 2015 to $4,286,000 in 2016.
A fall in the value of the Chinese Renminbi and British Pound in
2016, caused foreign exchange losses of $532,000 (2015 $447,000) to
be incurred.
Losses on the disposal of plant and equipment of $224,000 were
recorded in 2016 compared to $48,000 in 2015.
Income taxes of $4,468,000 (2015 $1,246,000) have been charged
in 2016. This includes a deferred taxation provision of $151,000
(2015 $813,000) and a charge of $573,000 in respect of deductions
made in prior years since disallowed by the Chinese tax
authorities.
Basic earnings per share in 2016 was 3.30 cents (2015 loss 1.22
cents) and diluted earnings per share was 3.26 cents (2015 loss
1.22 cents).
Bank loans of $14,891,000 were repaid in 2016 (2015 $3,171,000
drawn down) whilst cash and cash equivalents fell by $10,711,000 in
2016 (2015 reduction $1,520,000) with:
-- Net cash inflow from operating activities in 2016 of $21,903,000 (2015 $25,165,000); and
-- $11,104,000 invested in mine development and plant upgrades in 2016, (2015 $16,044,000).
Attributable net assets per share at 31st December 2016 was 80
cents ( 2015 78 cents).
With cash flows from operations directed to repaying banking
facilities the directors do not recommend the payment of a dividend
at this time.
Chairman's Statement:
2016 was a year when the aberration of our first loss in a
decade in 2015 was cast aside and profitability was restored.
Financially, the Company made an operating profit of $15.2
million, profit before tax of $10.4 million and after profit tax of
almost $6 million. Operationally, a record number of tonnes were
mined and processed whilst cost of sales fell significantly, even
though only low grade ore could be processed via stockpiles during
the cessation of mining activity and, upon recommencement of
mining, only from residual low grade ore in the higher mine levels.
Notably, gold production reached a new record high of 12,654 ounces
in concentrate.
Further good news included the completion of the upgrade on the
28(th) January 2016 to the mine and processing facilities to a 1.5
million tonne throughput capacity, the addition of a second 35,000
volt grid power line to site, a new safety permit over the lower
levels of Zone III and the continuing drive to improve efficiencies
with the commissioning of a new, electro hydraulic longhole drill
rig.
Non-operationally, almost $15 million of debt was repaid in
2016. And although I believe share price is a very poor indicator
of a Company's value and performance, it is pleasing to see that
the share price has increased over 115% in the past 12 months.
Critically, the fundamental outlook for zinc continues to
improve. According to the International Lead and Zinc Study Group,
the zinc market continues to register a supply deficit, short
268,000 tonnes in 2016 and, in January 2017, already short 27,000
tonnes with storage at the London Metal Exchange declining 31,000
tonnes. This is being reflected in lower smelter charges and a
higher overall zinc price.
Most pleasing, on the 14(th) December 2016 and in the presence
of the Australian Ambassador to China and senior officials from the
Ministry of Land and Resources and Zhangjiakou City, an agreement
was signed whereby the Company was granted the right to explore, in
particular, the Shitouhulun and Sangongdi areas near the Caijiaying
Mine. Both areas share the same geological signatures as the known
orebodies at the Caijiaying Mine and high hopes exist for
exploration success once work begins on these regions.
It would, of course, be disingenuous of me to hide the fact that
our overwhelming, continuing, disappointment lies in the failure to
be granted a mining licence over Zone II and thereby increase our
throughput to our now expanded processing capacity. It has become a
frustrating reality in the mining world that mining licences are
taking ever longer to obtain due to administrative labyrinths,
constant legislative changes, environmental issues needing
over-addressing and native concerns being constantly satisfied.
China is no different in this respect. The overwhelming question
asked by shareholders is when will the licence be granted? I have
made predictions in the past and have been proved horribly wrong. I
will merely state I have high hopes for 2017.
It would be unfair of me not to thank the directors, staff and
contractors who continue to strive to make the Company an even
greater success than it has already become. Any organization is
only as competent and dynamic as the people who work, think and act
solely in the best interest of the Company. Ours are some of the
best in the industry, and in country, and we thank them for their
outstanding efforts.
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 2016
(expressed in thousands US dollars)
2016 2015
Audited Audited
$000 $000
Revenue 66,270 59,779
Cost of sales (37,851) (42,948)
-------- --------
Gross profit 28,419 16,831
Administration expenses (13,218) (12,530)
-------- --------
Profit from operations 15,201 4,301
Losses on disposal of plant and equipment (224) (48)
Foreign exchange (losses) (532) (447)
Finance income 178 202
Finance costs (4,286) (5,084)
Other income 45 136
Profit / (loss) before tax 10,382 (940)
Income tax expense (4,468) (1,246)
Profit / (Loss) after tax 5,914 (2,186)
======== ========
Basic earnings / (loss) per share
(cents) 3.30 (1.22)
======== ========
Diluted earnings / (loss) per share
(cents) 3.26 (1.22)
======== ========
Griffin Mining Limited
Summarised Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
(expressed in thousands US dollars)
2016 2015
Audited Audited
$000 $000
Profit / (Loss) for the year 5,914 (2,186)
--------- ---------
Other comprehensive income that
will be reclassified to profit
or loss
Exchange differences on translating
foreign operations (3,299) (2,967)
Other comprehensive income for
the period, net of tax (3,299) (2,967)
--------- ---------
Total comprehensive income for
the period 2,615 (5,153)
========= =========
Griffin Mining Limited
Summarised Consolidated Statement of Financial Position
As at 31 December 2016
(expressed in thousands US dollars)
2016 2015
Audited Audited
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 204,491 210,252
Intangible assets - Exploration
interests 1,792 1,870
206,283 212,122
-------- --------
Current assets
Inventories 6,148 7,182
Receivables and other current assets 8,232 3,194
Cash and cash equivalents 13,218 24,062
-------- --------
27,598 34,438
-------- --------
Total assets 233,881 246,560
======== ========
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital 1,790 1,790
Share premium 71,310 71,310
Contributing surplus 3,690 3,690
Share based payments 2,072 1,363
Shares held in treasury (3,875) (3,875)
Chinese statutory re-investment
reserve 1,583 1,595
Other reserve on acquisition of
non controlling interests (29,346) (29,346)
Foreign exchange reserve 4,871 8,068
Profit and loss reserve 91,174 85,350
-------- --------
Total equity attributable to equity
holders of the parent 143,269 139,945
-------- --------
Non-current liabilities
Long-term provisions 2,277 2,433
Deferred taxation 2,607 2,630
Finance lease 3,791 7,454
-------- --------
8,675 12,517
-------- --------
Current liabilities
Trade and other payables 34,466 28,977
Finance lease 2,783 1,982
Bank loans 44,688 63,139
-------- --------
Total current liabilities 81,937 94,098
Total equities and liabilities 233,881 246,560
======== ========
Attributable net asset value per
share to equity holders of parent $0.80 $0.78
Griffin Mining Limited
Summarised Consolidated Statement of Changes in Equity.
For the year ended 31 December 2016
(expressed in thousands US dollars)
Share Share Contributing Share Shares Chinese Other Foreign Profit Total
capital premium surplus based held re-investment reserve exchange and attributable
in on loss to
payments treasury reserve acquisition reserve reserve equity
of holders
non of parent
controlling
Interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
At 31st
December
2014 1,790 71,310 3,690 3,064 - 1,686 (29,365) 10,957 84,794 147,926
Regulatory
transfer
for future
investment - - - - - 6 - - (6) -
Purchase of
shares
for treasury - - - (3,875) - - - - (3,875)
Transfer of
share based
payments on
expiry - - - (2,748) - - - - 2,748 -
Cost of share
based
payments - - - 1,047 - - - - - 1,047
Transaction
with owners - - - (1,701) (3,875) 6 - - 2,742 (2,828)
------- ------- ------------ -------- --------- ------------- ----------- -------- ------- ------------
Loss for the
year - - - - - - - - (2,186) (2,186)
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - (97) 19 (2,889) - (2,967))
------- ------- ------------ -------- --------- ------------- ----------- -------- ------- ------------
Total
comprehensive
income - - - - - (97) 19 (2,889) (2,186) (5,153)
------- ------- ------------ -------- --------- ------------- ----------- -------- ------- ------------
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
======= ======= ============ ======== ========= ============= =========== ======== ======= ============
Griffin Mining Limited
Summarised Consolidated Cash Flow Statement
For the year ended 31 December 2016
(expressed in thousands US dollars)
2016 2015
Audited Audited
$000 $000
Net cash flows from operating
activities
Profit / (loss) before taxation 10,382 (940)
Foreign exchange losses 532 447
Finance income (178) (202)
Finance costs 4,286 5,084
Adjustment in respect of share
based payments 709 1,047
Depreciation, depletion and amortisation 8,526 6,808
Losses on disposal of equipment 224 48
Decrease in inventories 1,034 10,295
(Decrease) / increase in receivables
and other current assets (6,251) 804
Increase in trade and other payables 3,280 2,748
Taxation paid (641) (974)
Net cash inflow from operating
activities 21,903 25,165
-------- --------
Cash flows from investing activities
Interest received 178 202
Payments to acquire - mineral
interests (7,361) (8,960)
Payments to acquire - plant and
equipment (3,776) (7,215)
Payments to acquire - office equipment (102) (3)
Payments to acquire intangible
fixed assets - exploration interests (43) (68)
Net cash outflow from investing
activities (11,104) (16,044)
-------- --------
Cash flows from financing activities
Purchase of shares for treasury - (3,875)
Interest paid (3,684) (4,324)
Finance lease repayments (2,935) (2,573)
Proceeds from bank loans - 3,171
Repayment of bank loans (14,891) -
-------- --------
Net cash outflow from financing
activities (21,510) (7,601)
-------- --------
(Decrease) / increase in cash
and cash equivalents (10,711) 1,520
Cash and cash equivalents at the
beginning of the year 24,062 23,371
Effects of exchange rates (133) (829)
--------
Cash and cash equivalents at the
end of the year 13,218 24,062
-------- --------
Cash and cash equivalents comprise
bank deposits.
Bank deposits 13,218 24,062
======== ========
Included within net cash flows of $10,711,000 (2015 $1,520,000)
are foreign exchange losses of $532,000 (2015 losses $447,000)
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 2016 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 2016 statutory financial statements.
3. The annual report and accounts for 2016 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 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.
Reconciliation of the loss / earnings and weighted average
number of shares used in the calculations are set out below:
2016 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 5,914 179,091,830 3.30 (2,186) 179,091,830 (1.22)
Dilutive effect
of securities
Options - 2,248,862 (0.04) - - -
--------- ------------- --------- --------- ------------- ---------
Diluted earnings
per share 5,914 181,340,692 3.26 (2,186) 179,091,830 (1.22)
========= ============= ========= ========= ============= =========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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