Griffin Mining Limited (the “Company”) announces that it was notified yesterday that Dal Brynelsen’s wife purchased 15,000 shares on 30 May 2012 at 39.179p per share. Dal Brynelsen is now interested in a total of 15,001 shares in the Company.
The Griffin Mining 2011 annual report and accounts are now available to download from the website at
Griffin Mining Limited has today published its preliminary results for the year ended 31 December 2011.
Griffin Mining Limited (“Griffin” or the “Company”) and its subsidiaries (together the “Group”) achieved record results in 2011 with record production and record profit before tax of $39,953,000 (2010: $11,236,000). The record results follow the completion of processing plant upgrades, increased mining rates with uninterrupted production throughout the year.
Revenues increased to a record $79,062,000 (2010 $41,050,000) with record metal in concentrate sales resulting in increased profits from operations of $36,832,000 in 2011 from $13,143,000 in 2010. In summary:
Despite market prices for zinc metal in 2011 remaining generally unchanged from 2010, the average price per tonne of zinc metal in concentrate received increased to $1,546 in 2011 from $1,409 in 2010, indicating increased demand for zinc concentrate within China. The average price received for all other metals in concentrate sold in 2011 also improved over that achieved in 2010 with the average price received for gold being $1,438 per oz (2010 – $1,027), silver $26 per oz (2010 – $13.50) and lead $2,054 per tonne (2010 – $1,741).
Costs of sales increased in 2011 to $31,918,000 from $16,780,000 in 2010 due to increased production and mining and haulage costs increasing as lower mine levels were accessed. With the commissioning of the upgraded processing facilities, processing costs per tonne fell during 2011 as economies of scale begin to be felt with increased production.
Group operating costs, including mine site administration costs, fell in 2011 to $10,312,000 from $11,127,000 in 2010.
With cash balances averaged some $79 million in 2011 the Group benefited from interest receipts on those funds of $616,000 in 2011 (2010 – $350,000).
Foreign exchange gains of $2,588,000 were recorded in 2011 (2010 – $38,000). These gains arose on Renminbi accounts and sterling bank deposits. The Group is now permitted to hold Renminbi funds in Group bank accounts in Hong Kong.
Griffin’s 39.2% share of the losses of Spitfire Oil Limited (“Spitfire”) in 2011 was $118,000 (2010 – $109,000).
The increasing upward trend in metal prices led to no metal put options being purchased in 2011. The residual value of zinc put options purchased in 2010 of $14,000 was written off in 2011 (2010 – $2,224,000).
Income taxes in 2011 were $12,256,000 (2010 – $2,376,000). This increase reflects larger profits and an increase in PRC income tax from 12.5% to 25% due to the end of the pre-construction tax concessions enjoyed by Hebei Hua Ao Mining Company Limited (“Hebei Hua Ao”) and the PRC withholding tax of 10% on dividends paid overseas.
The minority party’s share of Hebei Hua Ao’s profit of $11,882,000 (2010 – $6,116,000) resulted in an attributable profit to Griffin of $15,815,000 (2010 – $2,744,00).
The Company’s basic earnings per share improved to 8.96 cents per share from 1.51 cents per share in 2010 with diluted earnings per share of 8.76 cents per share in 2011 (2010 – 1.49 cents per share).
During 2011, 5,040,000 (2010 – 1,580,000) ordinary shares were bought back on market for cancellation at a cost of $4,977,000 (2010 – $1,146,000) thereby reducing the number of Griffin shares in issue to 175,501,830.
Net cash inflow in 2011 increased to $23,433,000 (2010 outflow of $370,000) despite the share buyback programme, due to increased profits and lower capital expenditure.
Attributable net assets increased to 87 cents per share as at 31 December 2011 (2010 – 78 cents per share).
What began as a remarkable journey in 1997 has now culminated in the Company’s 88.8% ownership of a world class, extraordinarily long mine life, operating mine and a mineral province whose potential has only just begun to be tapped.
In the past year, the Company has striven to deliver on its promised potential. Financially, Griffin achieved a record profit before tax of $39,953,000, a 256% increase from the $11,236,000 result recorded in 2010.
Operationally, a record 715,955 tonnes of ore were processed compared to 420,928 tonnes in 2010, a 70% increase. A record 36,283 tonnes of zinc metal in concentrate were produced, compared to 22,044 tonnes in 2010, a 65% increase; a record 10,281 ounces of gold in concentrate were produced, compared to 7,067 ounces in 2010, a 45% increase; a record 312,509 ounces of silver in concentrate were produced, compared to 157,679 ounces in 2010, a 98% increase; and a record 1,909 tonnes of lead in concentrate were produced, compared to 690 tonnes in 2010, a 177% increase.
Geologically, the announcement of the new JORC Resource for Zones II and III at Caijiaying displayed the true potential of the orebody with a 32% increase in the Mineral Resource from 38.6 to 51.2 million tonnes, representing a 50 plus year mine life at an increased throughput rate. Not only was the Mineral Resource increased in Zone III, even with the mine depletion, by 8% from 29.1 to 31.5 million tonnes, but the Mineral Resource at Zone II was increased by 107% from 9.4 to 19.6 million tonnes. This is highly significant in that it will provide a second source of ore for the mill to service a planned increase in throughput in the near future. Further drilling results since the calculation of the new JORC Resource have only increased the likelihood of even further resource upgrades in the future.
Of course, the major achievement of 2011 was the announcement on the 10th May 2012 that the Company had entered into an agreement to increase its majority in Hebei Hua Ao Mining Industry Company Limited (“Hebei Hua Ao”) to 88.8% and extend the term of the Hebei Hua Ao joint venture through to 2037 (“the Transaction”). The enormity of this Transaction should not be lost. Firstly it allows for full management control to now rest with Griffin staff with the “government” layers of management abolished. Secondly, it allows planning with confidence to now proceed to apply for, and obtain, a mining licence at Zone II and to plan for an upgrade to the processing facilities and the necessary below ground development to increase throughput at Caijiaying up to 1.5 million tonnes per annum. All this with the security of knowing the Company will be at Caijiaying at least until 2037 and reaping the vast majority of the profits emanating from the Caijiaying mine.
Corporately, the Company continues to examine a vast array of possible corporate and asset acquisitions to see if they can meet the stringent financial, operating and political criteria demanded by the Company. In addition, the Company continues to evaluate and discuss the listing of Griffin on the Hong Kong Stock Exchange with a significant number of investment banks in Hong Kong.
As I have mentioned far too many times, all mining companies are subject to the vagaries of commodity prices. In normal circumstances, these prices are substantially governed by supply and demand equations and, to a lesser extent, commodity traders. Unfortunately, since the Global Financial Crisis in 2008 and the fiscal irresponsibility of investment banks, commercial banks and all levels of government, economic growth, so often driven by debt, has faltered. Whilst China and the emerging markets continue to grow and demand raw materials, the outlook looks rosy, particularly for the supply deficit predicted in the zinc market in the next 2 years. However, uncertainty remains with the mountain of debt in the public sector, the undercapitalized banking sector and the contracting economies of the European Union and the inevitable consequences for world trade, growth and commodities demand. We can only sit and wait to see what will be the outcome of this fiasco.
The directors do not recommend payment of a dividend at this time in view of the use of the Company’s financial resources to acquire a further 28.8% interest in Hebei Hua Ao Mining Industry Company Limited and an extension of the term of this Joint Venture.
| 2011 | 2010 | |||
| $000 | $000 | |||
| Revenue | 79,062 | 41,050 | ||
| Cost of sales | (31,918) | (16,780) | ||
| Gross profit | 47,144 | 24,270 | ||
| Net operating expenses | (10,312) | (11,127) | ||
| Profit from operations | 36,832 | 13,143 | ||
| Share of losses of associated company | (118) | (109) | ||
| Foreign exchange gains | 2,588 | 38 | ||
| Finance income | 616 | 350 | ||
| Finance losses | (14) | (2,224) | ||
| Other income | 49 | 38 | ||
| Profit before tax | 39,953 | 11,236 | ||
| Income tax expense | (12,256) | (2,376) | ||
| Profit after tax | 27,697 | 8,860 | ||
| Attributable to non-controlling interests | 11,882 | 6,116 | ||
| Attributable to equity share owners for the parent | 15,815 | 2,744 | ||
| 27,697 | 8,860 | |||
| Basic earnings per share (cents) | 8.96 | 1.51 | ||
| Diluted earnings per share (cents) | 8.76 | 1.49 |
| 2011 | 2010 | |||
| $000 | $000 | |||
| Profit for the year | 27,697 | 8,860 | ||
| Other comprehensive income | ||||
| Exchange differences on translating foreign operations | 2,417 | 1,374 | ||
| Other comprehensive income for the period, net of tax | 2,417 | 1,374 | ||
| Total comprehensive income for the period | 30,114 | 10,234 | ||
| Attributable to non-controlling interests | 12,691 | 6,218 | ||
| Attributable to equity owners of the parent | 17,423 | 4,016 | ||
| 30,114 | 10,234 |
| 2011 | 2010 | |||
| $000 | $000 | |||
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 85,291 | 77,745 | ||
| Intangible assets – Exploration interests | 1,573 | 1,481 | ||
| Investment in associated company | 3,759 | 3,877 | ||
| 90,623 | 83,103 | |||
| Current assets | ||||
| Inventories | 4,608 | 3,136 | ||
| Other current assets | 2,505 | 3,423 | ||
| Cash and cash equivalents | 91,089 | 66,450 | ||
| 98,202 | 73,009 | |||
| Total assets | 188,825 | 156,112 | ||
| EQUITY AND LIABILITIES | ||||
| Equity attributable to equity holders of the parent | ||||
| Share capital | 1,755 | 1,804 | ||
| Share premium | 70,061 | 74,948 | ||
| Contributing surplus | 3,690 | 3,690 | ||
| Share based payments | 3,030 | 2,513 | ||
| Other reserves | 1,300 | 938 | ||
| Foreign exchange reserve | 10,041 | 8,480 | ||
| Profit and loss reserve | 63,131 | 47,631 | ||
| Total equity attributable to equity holders of the parent | 153,008 | 140,004 | ||
| Non-controlling interests | 12,523 | 6,218 | ||
| Non-current liabilities | ||||
| Long-term provisions | 806 | 768 | ||
| Current liabilities | ||||
| Taxation payable | 11,631 | 1,011 | ||
| Trade and other payables | 10,857 | 8,111 | ||
| Total current liabilities | 22,488 | 9,122 | ||
| Total equities and liabilities | 188,825 | 156,112 | ||
| Number of shares in issue | 175,501,830 | 180,408,496 | ||
| Attributable net asset value / total equity per share | $0.87 | $0.78 |
| Share Capital | Share Premium | Contri-buting Surplus | Share Based Payment | Other Reserves | Foreign Exchange Reserve | Profit and Loss Reserve | Total attributable to equity holders of parent | Non- controlling Interests |
Total Equity | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| At 31 December 2009 | 1,817 | 75,984 | 3,690 | 4,790 | 759 | 7,234 | 40,440 | 134,714 | 2,616 | 137,330 |
| Regulatory transfer for future investment | – | – | – | – | 153 | – | (153) | – | – | – |
| Issue of share capital | 3 | 94 | – | – | – | – | – | 97 | – | 97 |
| Purchase of shares for cancellation | (16) | (1,130) | – | – | – | – | – | (1,146) | – | (1,146) |
| Cost of share based payments | – | – | – | 2,323 | – | – | – | 2,323 | – | 2,323 |
| Transfers in respect of share based payments | – | – | – | (4,600) | – | – | 4,600 | – | – | – |
| Transfers in respect of distributions | – | – | – | – | – | – | – | – | (2,616) | (2,616) |
| Transaction with owners | (13) | (1,036) | – | (2,277) | 153 | – | 4,447 | 1,274 | (2,616) | (1,342) |
| Profit for the year | – | – | – | – | – | – | 2,744 | 2,744 | 6,116 | 8,860 |
| Other comprehensive income: | ||||||||||
| Exchange differences on translating foreign operations | – | – | – | – |
26 |
1,246 | – | 1,272 |
102 |
1,374 |
| Total comprehensive income for the year | – | – | – | – | 26 | 1,246 | 2,744 | 4,016 | 6,218 | 10,234 |
| At 31 December 2010 | 1,804 | 74,948 | 3,690 | 2,513 | 938 | 8,480 | 47,631 | 140,004 | 6,218 | 146,222 |
| Regulatory transfer for future investment | – | – | – | – | 315 | – | (315) | – | – | – |
| Issue of share capital | 1 | 40 | – | – | – | – | – | 41 | – | 41 |
| Purchase of shares for cancellation | (50) | (4,927) | – | – | – | – | – | (4,977) | – | (4,977) |
| Cost of share based payments | – | – | – | 517 | – | – | – | 517 | – | 517 |
| Transfers in respect of distributions | – | – | – | – | – | – | – | – | (6,386) | (6,386) |
| Transaction with owners | (49) | (4,887) | – | 517 | 315 | – | (315) | (4,419) | (6,386) | (10,805) |
| Profit for the year | – | – | – | – | – | – | 15,815 | 15,815 | 11,882 | 27,697 |
| Other comprehensive income: | ||||||||||
| Exchange differences on translating foreign operations | – | – | – | – |
47 |
1,561 | – | 1,608 |
809 |
2,417 |
| Total comprehensive income for the year | – | – | – | – | 47 | 1,561 | 15,815 | 17,423 | 12,691 | 30,114 |
| At 31 December 2011 | 1,755 | 70,061 | 3,690 | 3,030 | 1,300 | 10,041 | 63,131 | 153,008 | 12,523 | 165,531 |
| 2011 | 2010 | |||
| $000 | $000 | |||
| Net cash flows from operating activities | ||||
| Profit before taxation | 39,953 | 11,236 | ||
| Share of associated company losses | 118 | 109 | ||
| Foreign exchange (gains) | (2,588) | (38) | ||
| Finance (income) | (616) | (350) | ||
| Finance losses | 14 | 2,224 | ||
| Adjustment in respect of share based payments | 517 | 2,323 | ||
| Depreciation, depletion and amortisation | 5,900 | 2,151 | ||
| (Increase) / decrease in inventories | (1,472) | (356) | ||
| (Increase) / decrease in other current assets | (1,226) | (747) | ||
| Increase / (decrease) in trade and other payables | 2,746 | 3,445 | ||
| Net cash inflow from operating activities | 43,346 | 19,997 | ||
| Taxation paid | (1,637) | (2,936) | ||
| Cash flows from investing activities | ||||
| Interest received | 616 | 350 | ||
| Payments to acquire intangible assets – exploration interests | (19) | (10) | ||
| Payments to acquire tangible assets – mineral interests | (6,073) | (10,162) | ||
| Payments to acquire tangible assets – plant and equipment | (3,605) | (4,285) | ||
| Payments to acquire tangible assets – office equipment | (2) | (36) | ||
| Payments to acquire put options | – | (2,239) | ||
| Net cash (outflow) from investing activities | (9,083) | (16,382) | ||
| Cash flows from financing activities | ||||
| Issue of ordinary share capital | 41 | 97 | ||
| Purchase of shares for cancellation | (4,977) | (1,146) | ||
| Dividends paid to non controlling interests | (4,257) | – | ||
| Net cash (outflow) from financing activities | (9,193) | (1,049) | ||
| Increase / (decrease) in cash and cash equivalents | 23,433 | (370) | ||
| Cash and cash equivalents at the beginning of the year | 66,450 | 67,630 | ||
| Effects of exchange rates | 1,206 | (810) | ||
| Cash and cash equivalents at the end of the year | 91,089 | 66,450 | ||
| Cash and cash equivalents comprise bank deposits. | ||||
| Bank deposits | 91,089 | 66,450 |
Included within net cash flows of $23,423,000 (2010 $370,000) are foreign exchange gains of $2,588,000 (2010 $38,000) which have been treated as realised.
| 2011 | 2010 | ||||||||||
| Earnings
$000 |
Weighted
Average number of shares |
Per share amount (cents) | Earnings
$000 |
Weighted
Average number of shares |
Per share amount (cents) | ||||||
| Basic earnings per share | |||||||||||
| Earnings attributable to ordinary shareholders | 15,815 | 176,499,620 | 8.96 |
2,744 |
181,579,409 |
1.51 |
|||||
| Dilutive effect of securities | |||||||||||
| Options | 3,981,592 | 2,648,124 | |||||||||
| Diluted earnings per share | 15,815 | 180,481,212 | 8.76 |
2,744 |
184,227,533 |
1.49 |
Griffin Mining Limited (“Griffin” or “the Company”) is delighted to announce continued excellent results from underground diamond drilling at its Caijiaying mine in northern China. The Company conducted a comprehensive program of diamond drilling comprising 190 underground drill holes for 30,244 metres. None of these assays were obtained in time to be included in the announced JORC Resource of the 22nd May 2012. The major results of the drilling program have been summarised in the attached Appendix.
Better gold assays included:
Better zinc assays included:
High-grade gold mineralization was identified in underground extensions of the Ju Long, Fu Long, Xiao Long and Qing Long ore bodies. In addition to the high-grade gold intersections, Griffin continues to intersect high-grade zinc zones within a wider envelope of medium-grade zinc-gold-lead-silver ore. Drilling will continue during 2012 to further delineate and evaluate the highly prospective corridor of mineralization.
The discovery of this new high-grade gold, zinc, lead and silver mineralization within the Caijiaying ore body can be expected to make a significant and increasing contribution to mine revenue
Chairman Mladen Ninkov commented, “Even after the production of an exceptional new JORC resource, further new drill results exemplify the ever increasing size of this world class, polymetallic, orebody. The enduring faith of the Company’s shareholders continues to be repaid in abundance. I could not be more delighted for our shareholders.”
The following table contains all significant underground gold intersections;
| Hole No. | From (metres) | To (metres) | Interval (metres) | Gold (g/t) | Zinc (%) | Lead (%) | Silver (g/t) |
| UGCJY-1981 | 52.80 | 56.60 | 3.80 | 3.53 | 3.72 | 0.50 | 51 |
| UGCJY-1982 | 46.15 | 52.00 | 5.85 | 6.38 | 8.76 | 0.19 | 37 |
| UGCJY-1982 | 61.00 | 67.80 | 6.80 | 2.52 | 6.02 | 0.26 | 51 |
| UGCJY-1982 | 72.15 | 76.70 | 4.55 | 3.52 | 4.63 | 0.10 | 26 |
| UGCJY-1982 | 82.00 | 92.00 | 10.00 | 2.81 | 3.98 | 0.27 | 27 |
| UGCJY-1983 | 100.25 | 102.35 | 2.10 | 6.41 | 13.61 | 0.23 | 86 |
| UGCJY-1983 | 105.50 | 109.20 | 3.70 | 3.00 | 2.97 | 0.01 | 9 |
| UGCJY-1983 | 194.25 | 200.30 | 6.05 | 4.16 | 7.81 | 0.02 | 7 |
| UGCJY-1987 | 49.50 | 57.45 | 7.95 | 2.10 | 4.53 | 0.02 | 11 |
| UGCJY-1988 | 41.70 | 49.65 | 7.95 | 2.41 | 1.01 | 0.01 | 19 |
| UGCJY-1989 | 17.20 | 19.40 | 2.20 | 2.59 | 5.25 | 0.01 | 6 |
| UGCJY-1990 | 78.50 | 83.80 | 5.30 | 2.67 | 6.33 | 0.02 | 7 |
| UGCJY-1992 | 23.70 | 26.50 | 2.80 | 5.23 | 7.80 | 0.87 | 42 |
| UGCJY-1992 | 131.90 | 134.00 | 2.10 | 31.67 | 7.97 | 0.05 | 72 |
| UGCJY-1992 | 177.30 | 181.00 | 3.70 | 10.04 | 3.95 | 0.12 | 38 |
| UGCJY-1993 | 23.10 | 25.30 | 2.20 | 2.96 | 11.29 | 0.31 | 35 |
| UGCJY-1993 | 140.80 | 143.80 | 3.00 | 1.91 | 0.26 | 0.04 | 7 |
| UGCJY-1994 | 18.00 | 20.90 | 2.90 | 1.71 | 9.03 | 0.16 | 35 |
| UGCJY-1994 | 23.30 | 27.35 | 4.05 | 6.09 | 11.48 | 0.33 | 54 |
| UGCJY-1994 | 51.15 | 55.40 | 4.25 | 2.34 | 2.32 | 0.03 | 34 |
| UGCJY-1996 | 33.00 | 41.45 | 8.45 | 6.85 | 7.89 | 0.29 | 40 |
| UGCJY-1997 | 63.25 | 70.75 | 7.50 | 3.63 | 7.27 | 0.17 | 52 |
| UGCJY-1997 | 80.30 | 89.60 | 9.30 | 1.97 | 2.50 | 0.01 | 6 |
| UGCJY-1997 | 106.10 | 110.75 | 4.65 | 1.98 | 4.17 | 0.05 | 20 |
| UGCJY-2001 | 15.40 | 18.00 | 2.60 | 4.78 | 10.65 | 0.01 | 13 |
| UGCJY-2001 | 31.00 | 38.80 | 7.80 | 2.60 | 1.52 | 0.01 | 6 |
| UGCJY-2002 | 14.20 | 18.00 | 3.80 | 3.59 | 6.79 | 0.11 | 43 |
| UGCJY-2003 | 13.40 | 16.20 | 2.80 | 1.66 | 0.73 | 0.01 | 7 |
| UGCJY-2006 | 54.80 | 61.40 | 6.60 | 1.54 | 6.82 | 0.04 | 7 |
| UGCJY-2006 | 91.80 | 94.15 | 2.35 | 1.66 | 7.31 | 0.01 | 6 |
| UGCJY-2014 | 83.90 | 87.00 | 3.10 | 2.67 | 0.90 | 0.87 | 6 |
| UGCJY-2014 | 128.40 | 132.00 | 3.60 | 2.33 | 2.45 | 0.49 | 36 |
| UGCJY-2014 | 135.00 | 138.90 | 3.90 | 2.62 | 3.08 | 1.25 | 24 |
| UGCJY-2015 | 88.60 | 90.60 | 2.00 | 7.66 | 6.54 | 0.07 | 25 |
| UGCJY-2021 | 79.50 | 89.00 | 9.50 | 2.12 | 3.98 | 0.66 | 21 |
| UGCJY-2021 | 98.20 | 103.90 | 5.70 | 1.75 | 2.23 | 0.01 | 9 |
| UGCJY-2021 | 113.15 | 116.20 | 3.05 | 1.29 | 3.08 | 0.03 | 15 |
| UGCJY-2022 | 177.50 | 180.00 | 2.50 | 20.59 | 4.27 | 0.03 | 41 |
| UGCJY-2029 | 0.60 | 4.60 | 4.00 | 20.13 | 7.38 | 0.22 | 87 |
| UGCJY-2032 | 8.20 | 11.20 | 3.00 | 2.13 | 7.31 | 1.32 | 49 |
| UGCJY-2033 | 2.15 | 5.15 | 3.00 | 2.06 | 7.19 | 0.80 | 49 |
| UGCJY-2033 | 15.00 | 18.20 | 3.20 | 1.22 | 12.34 | 0.55 | 62 |
| UGCJY-2041 | 30.50 | 34.50 | 4.00 | 2.10 | 6.04 | 1.36 | 149 |
| UGCJY-2052 | 34.50 | 44.00 | 9.50 | 7.53 | 6.65 | 0.02 | 13 |
| UGCJY-2052 | 138.00 | 140.00 | 2.00 | 1.30 | 2.01 | 0.03 | 9 |
| UGCJY-2056 | 58.90 | 65.95 | 7.05 | 7.81 | 5.74 | 0.06 | 45 |
| UGCJY-2057 | 47.50 | 58.10 | 10.60 | 1.95 | 2.83 | 0.07 | 21 |
| UGCJY-2057 | 65.00 | 102.40 | 37.40 | 6.55 | 4.33 | 0.11 | 49 |
| UGCJY-2057 | 179.30 | 181.85 | 2.55 | 3.90 | 4.97 | 0.01 | 6 |
| UGCJY-2075 | 17.70 | 22.05 | 4.35 | 3.34 | 4.54 | 0.05 | 37 |
| UGCJY-2075 | 26.80 | 30.05 | 3.25 | 2.73 | 4.24 | 0.12 | 38 |
| UGCJY-2077 | 17.60 | 20.05 | 2.45 | 32.23 | 10.46 | 0.05 | 35 |
| UGCJY-2078 | 16.20 | 22.30 | 6.10 | 2.37 | 2.69 | 0.08 | 12 |
| UGCJY-2079 | 42.60 | 45.35 | 2.75 | 10.77 | 5.06 | 0.03 | 37 |
| UGCJY-2081 | 72.70 | 76.90 | 4.20 | 1.17 | 5.35 | 0.85 | 162 |
| UGCJY-2082 | 128.00 | 131.30 | 3.30 | 0.96 | 0.96 | 0.00 | 3 |
| UGCJY-2084 | 47.70 | 50.00 | 2.30 | 2.54 | 4.11 | 0.08 | 15 |
| UGCJY-2084 | 68.25 | 73.85 | 5.60 | 11.90 | 9.66 | 0.04 | 33 |
| UGCJY-2084 | 150.20 | 152.20 | 2.00 | 3.00 | 0.41 | 0.02 | 11 |
| UGCJY-2085 | 46.20 | 52.70 | 6.50 | 5.38 | 3.24 | 0.12 | 20 |
| UGCJY-2085 | 70.50 | 73.02 | 2.52 | 5.90 | 2.23 | 0.01 | 6 |
| UGCJY-2085 | 146.00 | 159.00 | 13.00 | 7.31 | 3.45 | 0.01 | 6 |
| UGCJY-2086 | 48.15 | 54.70 | 6.55 | 3.99 | 4.73 | 0.25 | 17 |
| UGCJY-2086 | 68.50 | 71.65 | 3.15 | 17.79 | 9.40 | 0.08 | 41 |
| UGCJY-2088 | 47.40 | 52.90 | 5.50 | 3.65 | 6.20 | 0.06 | 10 |
| UGCJY-2088 | 166.80 | 169.25 | 2.45 | 28.35 | 4.05 | 0.01 | 16 |
| UGCJY-2089 | 52.20 | 58.70 | 6.50 | 1.74 | 2.66 | 0.04 | 8 |
| UGCJY-2089 | 133.15 | 140.00 | 6.85 | 2.88 | 2.68 | 0.20 | 21 |
| UGCJY-2089 | 186.40 | 192.65 | 6.25 | 4.40 | 2.69 | 0.01 | 5 |
| UGCJY-2090 | 58.00 | 61.00 | 3.00 | 9.20 | 5.94 | 0.25 | 23 |
| UGCJY-2090 | 70.55 | 105.55 | 35.00 | 5.23 | 4.47 | 0.21 | 50 |
| UGCJY-2090 | 170.65 | 175.00 | 4.35 | 5.80 | 3.66 | 0.07 | 30 |
| UGCJY-2099 | 99.30 | 102.30 | 3.00 | 1.56 | 11.14 | 0.01 | 9 |
| UGCJY-2101 | 53.70 | 55.70 | 2.00 | 2.36 | 0.29 | 0.03 | 7 |
| UGCJY-2103A | 54.55 | 56.55 | 2.00 | 9.56 | 5.44 | 0.08 | 13 |
| UGCJY-2103A | 97.00 | 101.95 | 4.95 | 8.98 | 0.13 | 0.14 | 79 |
| UGCJY-2104 | 14.00 | 25.00 | 11.00 | 8.98 | 12.63 | 1.37 | 117 |
| UGCJY-2107A | 22.00 | 27.00 | 5.00 | 1.20 | 5.82 | 0.68 | 34 |
| UGCJY-2110 | 90.30 | 94.30 | 4.00 | 2.47 | 1.76 | 0.08 | 12 |
| UGCJY-2110 | 143.80 | 146.00 | 2.20 | 4.25 | 5.19 | 0.14 | 67 |
| UGCJY-2111 | 195.40 | 199.00 | 3.60 | 2.70 | 1.81 | 0.01 | 5 |
| UGCJY-2113 | 38.80 | 44.45 | 5.65 | 1.99 | 3.51 | 0.04 | 17 |
| UGCJY-2113 | 54.50 | 61.55 | 7.05 | 7.08 | 6.26 | 0.07 | 47 |
| UGCJY-2114 | 39.00 | 67.50 | 28.50 | 3.42 | 1.92 | 0.05 | 29 |
| UGCJY-2114 | 71.50 | 74.50 | 3.00 | 2.62 | 1.20 | 0.01 | 5 |
| UGCJY-2115A | 97.90 | 108.80 | 10.90 | 2.69 | 4.05 | 0.02 | 14 |
| UGCJY-2115A | 121.85 | 132.20 | 10.35 | 1.56 | 1.80 | 0.01 | 4 |
| UGCJY-2115A | 147.40 | 152.10 | 4.70 | 2.39 | 2.48 | 0.02 | 31 |
| UGCJY-2117 | 176.90 | 179.70 | 2.80 | 2.39 | 2.76 | 0.01 | 5 |
| UGCJY-2118 | 44.90 | 47.00 | 2.10 | 26.26 | 12.54 | 0.41 | 36 |
| UGCJY-2118 | 194.40 | 196.90 | 2.50 | 1.61 | 0.89 | 0.06 | 11 |
| UGCJY-2120 | 110.35 | 112.85 | 2.50 | 5.69 | 12.55 | 0.05 | 14 |
| UGCJY-2120 | 121.40 | 137.00 | 15.60 | 1.81 | 1.44 | 0.43 | 39 |
| UGCJY-2120 | 140.80 | 145.10 | 4.30 | 9.57 | 2.70 | 0.09 | 28 |
| UGCJY-2130 | 13.90 | 18.20 | 4.30 | 3.06 | 1.47 | 1.30 | 30 |
| UGCJY-2138 | 40.90 | 43.20 | 2.30 | 5.53 | 5.21 | 0.15 | 79 |
| UGCJY-2138 | 83.50 | 88.00 | 4.50 | 1.65 | 2.97 | 0.04 | 14 |
| UGCJY-2143 | 39.30 | 45.60 | 6.30 | 1.60 | 5.34 | 0.42 | 52 |
1g/t gold cut-off with a maximum of 2m of internal dilution and a minimum length of 2m.
The following table contains all significant underground zinc intersections;
| Hole No. | From (metres) | To (metres) | Interval (metres) | Zinc (%) | Lead (%) | Silver (g/t) | Gold (g/t) |
| UGCJY-1982 | 72.15 | 83.30 | 11.15 | 4.36 | 0.14 | 20 | 1.70 |
| UGCJY-1986 | 61.00 | 72.00 | 11.00 | 10.21 | 0.23 | 28 | 0.40 |
| UGCJY-1994 | 12.80 | 27.35 | 14.55 | 9.32 | 0.27 | 36 | 2.16 |
| UGCJY-1996 | 31.00 | 44.80 | 13.80 | 7.99 | 0.20 | 29 | 4.53 |
| UGCJY-2006 | 54.80 | 65.30 | 10.50 | 7.63 | 0.15 | 11 | 1.15 |
| UGCJY-2006 | 67.40 | 78.00 | 10.60 | 8.99 | 0.02 | 10 | 0.49 |
| UGCJY-2021 | 75.30 | 86.75 | 11.45 | 4.07 | 0.55 | 19 | 1.56 |
| UGCJY-2022 | 147.60 | 173.00 | 25.40 | 15.50 | 0.09 | 22 | 0.18 |
| UGCJY-2022 | 178.85 | 196.10 | 17.25 | 6.40 | 0.07 | 40 | 2.95 |
| UGCJY-2023 | 111.00 | 121.90 | 10.90 | 7.47 | 0.23 | 20 | 0.34 |
| UGCJY-2040 | 25.00 | 37.00 | 12.0 | 6.11 | 0.98 | 75 | 0.08 |
| UGCJY-2041 | 20.30 | 38.50 | 18.2 | 7.25 | 1.26 | 100 | 0.89 |
| UGCJY-2044 | 62.90 | 79.20 | 16.3 | 13.32 | 0.30 | 59 | 3.21 |
| UGCJY-2044 | 81.70 | 111.70 | 30.0 | 10.91 | 0.48 | 44 | 0.21 |
| UGCJY-2045 | 127.20 | 139.80 | 12.6 | 7.03 | 0.21 | 23 | 0.64 |
| UGCJY-2052 | 152.10 | 178.50 | 26.4 | 6.81 | 0.37 | 15 | 0.36 |
| UGCJY-2053 | 143.30 | 153.30 | 10.0 | 5.46 | 0.10 | 11 | 0.64 |
| UGCJY-2057 | 65.00 | 77.00 | 12.0 | 8.62 | 0.23 | 107 | 12.63 |
| UGCJY-2058 | 54.95 | 66.50 | 11.6 | 5.93 | 0.58 | 91 | 0.69 |
| UGCJY-2061 | 99.15 | 110.20 | 11.1 | 5.38 | 0.40 | 30 | 0.19 |
| UGCJY-2076 | 45.80 | 58.00 | 12.2 | 6.10 | 0.01 | 6 | 0.38 |
| UGCJY-2083 | 152.00 | 176.90 | 24.9 | 7.50 | 0.55 | 28 | 0.36 |
| UGCJY-2090 | 70.55 | 84.50 | 14.0 | 6.18 | 0.23 | 78 | 7.91 |
| UGCJY-2090 | 87.50 | 99.10 | 11.6 | 4.21 | 0.19 | 36 | 4.09 |
| UGCJY-2091 | 96.50 | 113.80 | 17.3 | 9.22 | 0.32 | 38 | 0.27 |
| UGCJY-2098 | 70.70 | 81.90 | 11.2 | 8.07 | 0.08 | 20 | 0.07 |
| UGCJY-2099 | 86.15 | 106.45 | 20.3 | 7.54 | 0.04 | 13 | 0.41 |
| UGCJY-2106 | 95.00 | 107.50 | 12.5 | 5.52 | 0.41 | 25 | 0.13 |
| UGCJY-2109 | 131.70 | 147.30 | 15.6 | 14.70 | 0.28 | 56 | 0.14 |
| UGCJY-2119 | 62.70 | 88.90 | 26.2 | 8.47 | 0.56 | 58 | 3.74 |
| UGCJY-2131 | 55.15 | 71.50 | 16.4 | 11.04 | 0.40 | 40 | 0.28 |
| UGCJY-2139 | 26.45 | 37.50 | 11.1 | 6.39 | 0.30 | 73 | 0.09 |
| UGCJY-2143 | 34.95 | 45.60 | 10.7 | 6.90 | 0.52 | 69 | 1.17 |
| UGCJY-2158 | 74.00 | 86.05 | 12.1 | 6.42 | 0.15 | 34 | |
| UGCJY-2160 | 47.00 | 57.50 | 10.5 | 6.32 | 0.05 | 11 | |
| UGCJY-2179 | 163.50 | 182.25 | 18.8 | 6.30 | 0.64 | 57 |
Using a 3% zinc cut-off with 2m of internal dilution and a minimum length of 10m.
The data in this report that relates to exploration results for the Caijiaying Area, China, is based on information reviewed by Mr Nigel Wilson who is a Member of the Australian Institute of Geoscientists. Mr Wilson is a full time employee of CSA Global Limited. Mr Wilson has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wilson consents to the inclusion in the report of the exploration results in the form and context in which they appear.
Griffin” or “the Company”) is delighted to announce that a new JORC reported Mineral Resource Estimate for Caijiaying has been finalized and not only increases the contained tonnes within the Zone III mineral resource after mining depletion, but also almost doubles the contained tonnes and metal within the Zone II mineral resource. In summary:
Drilling has continued to provide success along strike and south of Zone III to Zone II, allowing the reinterpretation and upgrade of the Zone II mineral resource. Diamond drilling continued underground in Zone II with a total of 33,887 metres drilled. Surface diamond drilling continued in Zone II with a total of 10,053 metres drilled. This drilling continued to add significant mineralization to the Zone II mineral resource.
With the Mineral Resource Estimate at Zone II approaching 20 million tonnes and the drilling density achieving the required level, an application for a further mining licence will be made during 2012. The mining licence will ensure that all the known mineralisation covering Zones II and III and the contiguous area between them will be covered. This should allow a second ore source to be mined at Caijiaying and significantly extend the life of the mining operations.
The 2012 Mineral Resource estimate is reported at a zinc cut-off of 1%. Tabled below is the summary of the recently updated 2012 Mineral Resource.
| Lodes | Category | Tonnes | Metal Grade | Contained Metal | ||||||
| Zinc | Lead | Silver | Gold | Zinc | Lead | Silver | Gold | |||
| ‘000 t | % | % | Grammes per tonne |
Grammes per tonne |
Tonnes | Tonnes | Ounces | Ounces | ||
| Zone III – Fu, Jin, Qing, Xiao, Ju, Chang, Hong Long lodes |
Measured | 4,447 | 5.6 | 0.32 | 30.3 | 0.76 | 249,000 | 14,000 | 4,331,900 | 109,400 |
| Indicated | 10,926 | 4.84 | 0.26 | 27.03 | 0.73 | 529,000 | 28,000 | 9,495,000 | 258,000 | |
| Inferred | 1,146 | 4.78 | 0.28 | 31.37 | 0.46 | 55,000 | 3,000 | 1,156,200 | 17,000 | |
| Sub total | 16,519 | 5.04 | 0.28 | 28.21 | 0.72 | 832,000 | 46,000 | 14,983,100 | 384,000 | |
| Zone III – Caijiaying Inferred |
Inferred | 15,075 | 3.91 | 0.22 | 21.68 | 0.76 | 589,000 | 32,000 | 10,507,600 | 370,400 |
| Sub-total Zone III | 31,594 | 4.50 | 0.25 | 25.09 | 0.74 | 1,422,000 | 78,000 | 25,490,700 | 754,800 | |
| Zone II – ALL |
Measured | – | – | – | – | – | – | – | – | – |
| Indicated | 4,056 | 3.02 | 0.68 | 24.87 | 0.30 | 123,000 | 27,000 | 3,242,800 | 39,300 | |
| Inferred | 15,570 | 3.31 | 0.75 | 24.53 | 0.25 | 516,000 | 117,000 | 12,276,700 | 124,200 | |
| Sub-total Zone II | 19,626 | 3.25 | 0.73 | 24.6 | 0.26 | 638,000 | 144,000 | 15,519,600 | 163,500 | |
| Total | 51,220 | 4.02 | 0.43 | 24.90 | 0.56 | 2,060,000 | 222,000 | 41,010,200 | 918,300 | |
The information in this report that relates to the May 2012 Mineral Resource estimates is based on information compiled by Mr Matthew Stevens, B.Sc. (Hons) Geology, Member AIG. Mr Stevens was a full time employee of CSA Global Pty Ltd. Mr Stevens has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration results, Mineral Resources and Ore Reserves’ (the JORC Code). Mr Stevens consents to the inclusion in the report of the matters based on his information in the form and context which they appear.
Chairman Mladen Ninkov commented, “The new JORC resource is a further indication and vindication of the size and scale of the orebody at Caijiaying. New drilling continues on a consistent basis to add further resources and additional mine life to the operations at Caijiaying. The Company continues to move forward with plans for even higher extraction and processing rates of this world class orebody. Again, I could not be happier for the Company’s shareholders.”
Griffin Mining Limited (“Griffin” or “the Company”) is delighted to announce that it has entered into an agreement to purchase the majority of the Zhangjiakou Caijiaying Lead Zinc Mining Company Limited’s (the “ZJK Mining Company”) interest in Hebei Hua Ao Mining Industry Company Limited (“Hua Ao”), the owner of the Caijiaying Zinc-Gold Mine and surrounding tenements, for Rmb 700 million (approx $110 million) in cash. When the transaction is completed, Griffin’s interest in Hua Ao will increase from 60% to 88.8% and the joint venture will operate under an extended 25 year term through to 2037. The ZJK Mining Company will retain an 11.2% interest in Hua Ao.
The purchase is conditional upon the approval of and registration by the relevant Chinese authorities. It is estimated that the approvals will take up to two months to complete. The purchase will be financed from undistributed retained dividends in Hua Ao, committed banking facilities in China and Griffin’s existing cash resources.
Griffin’s Chairman, Mladen Ninkov, commented: “The acquisition of an overwhelming majority interest in the Caijiaying Mine and the extension of the joint venture to 2037 with full management control, has been the dream which management and shareholders have held since production first began at Caijiaying in 2005. It is a credit to the directors and management of the company and a testament to the harmonious relations Griffin has maintained with all levels of government, community, employees and citizens in China that this transaction has been able to be achieved. We look forward to the ensuing decades and the continuing expansion of resources and production at Caijiaying. I could not be more delighted for our shareholders.”
Griffin Mining Limited expects to publish its results for 2011 at the end of May 2012. The results are expected to be in line with market expectations.
