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Griffin Mining News
Griffin Mining Limited (“Griffin”or the “Company”) has today published its results for the year ended 31 December 2004. The Company recorded a profit for the year to 31 December 2004 of $398,000 compared to a loss of $20,000 in 2003. Foreign exchange gains of $939,000 were achieved on foreign currency deposits in 2004 compared to $476,000 in 2003, whilst interest income increased to $507,000 in 2004 compared to $90,000 in 2003. Operating costs in 2004 increased to $1,048,000 (2003 $586,000) as a result of increased activity with the development of the Caijiaying zinc gold mine in China. Shareholders’ funds increased from $13,365,000 at 31 December 2003 to $29,336,000 at 31 December 2004, with the benefit of the profit for the year, a placing of 35,000,000 new ordinary shares, and the exercise of options and warrants over 7,100,000 new ordinary shares, to raise a total of $15,630,000 after expenses. With completion of these capital raisings, which fully fund construction of Griffin’s zinc gold mine and processing facilities at Caijiaying, exploration and development costs incurred to date of $6,419,000 have been reclassified as tangible fixed assets in accordance with International Financial Reporting Standards. Further expenditure of $10,037,000 was incurred in constructing the mine and processing facilities to 31 December 2004. Dry commissioning has now commenced and construction costs are in line with that estimated in the feasibility study produced in August 2003. Mladen Ninkov, Chairman commented as follows: After a long, arduous and frantic 7 years, having weathered the doom merchants and scaremongers, the Company stands ready to deliver on its promises with completion of construction of the Caijiaying processing facilities and the development of the underground mine workings at Caijiaying. As we go to press, dry commissioning has begun at Caijiaying and, by the time of the Annual General Meeting of the Company, full production should have commenced. To our knowledge, Caijiaying will be the first foreign owned and built, new hard rock mining operation in China in over 100 years. The last 7 years have shown management to have made some significant and positive decisions. The Company now has a project almost in production with no debt on its balance sheet, no hedging commitments and substantial cash balances. This is a unique and extremely strong financial position for the Company to find itself in. The Company is not hampered by penury commercial bank covenants, nor the need to pay interest on any debt and has not been hamstrung by the obligation to sell forward its base and precious metals production. Significantly , the Company was able to avoid the need to appoint an EPCM contractor to build the Caijiaying facilities on a “fixed price” contract basis, a usual requirement of bank financing. Instead the Company itself has controlled the building of Caijiaying due to its strong balance sheet position. The cost savings to shareholders have been substantial. This does not mean, of course, that the Company will rest on its laurels. The Company operates on the well known expression, “If you are not moving forwards, then you are moving backwards.” However, unlike so many other mining companies, the success of Caijiaying will not be dissipated by leveraging into an unwise acquisition or joint venture. Caijiaying still has enormous, untapped potential. In the first instance, the Company will immediately start examining the viability of expanding its production to 150% of its planned first year throughput. That will be a primary focus of the Company. Secondly, a huge amount of ground within the Company’s licence areas at Caijiaying require both primary and secondary exploration for precious and base metals. That also remains another primary focus of the Company. Thirdly, the Company will continue to investigate, conduct due diligence and make calculated decisions on any future mining acquisitions. These may occur anywhere the management believes it can find extraordinary value with a project which can weather a commodities downturn and provide the necessary shareholder returns. Inevitably, our first country of interest has been, and will remain, China. Although we have examined many acquisitions in China, none has yet met the mining, metallurgical and financial criteria we have set for the Company. The Company remains optimistic that such a project will be offered in due course following the commissioning of Caijiaying.
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Griffin Mining Limited 6th Floor 60 St James's Street London SW1A 1LE |
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Tel: +44 (0)20 7629 7772 Fax: +44 (0)20 7629 7773 |
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