• Tuesday 6th September 2011

Interim Statement for the 6 months ended 30th June 2011

Interim Statement for the 6 months ended 30th June 2011

Griffin Mining Limited (“Griffin” or “the Company”) is very pleased to publish its interim results for the six months ended 30th June 2011.

Highlights:

  • Increased revenues of $33.9m (2010 $27.0m)
  • Increased operating profit of $15.4m (2010 $11.2m)
  • Increased profit before tax of $17.9m (2010 $8.7m)
  • Increased profit after tax of $13.6m (2010 $6.8m)
  • Increased attributable profit after tax of $8.5m (2010 $2.0m)
  • Increased attributable earnings per share of 4.8 cents (2010 1.1 cent)
  • Reduced overhead costs of $5.5m (2010 $5.8m)
  • Record ore processed of 319,525 tonnes (2010 260,317 tonnes)
  • Record zinc metal in concentrate produced of 16,069 tonnes (2010 15,101 tonnes)
  • Record silver in concentrate produced of 117,036 ozs (2010 105,475 ozs)

Financial and Trading:

The results for the six months ended 30th June 2011 show a pre-tax profit of US$17,871,000 compared to a profit in the six months to 30th June 2010 of US$8,658,000. There has been an increase in turnover and operating profits despite a slow start in ramping up production at the beginning of the year following the suspension in operations in the later part of 2010. Although head grades were slightly lower than that in the same period in 2010, record zinc metal production of 16,069 tonnes was achieved in the period. Gold production of 4,493 ozs was marginally less than that achieved in 2010 of 4,570 ozs, however, gold recoveries and grades have begun to improve significantly. With the completion of the upgrade of the processing plant to a minimum capacity of 750,000 tonnes of ore per annum, mining and processing rates have stepped up during the period to meet the new processing capacity.

Operating costs have been reduced from $5,829,000 in six months to 30th June 2010 to $5,469,000 in the six months to 30th June 2011 which, with increased gross profits, resulted in increased operating profits of $15,382,000 compared to $11,201,000 in 2010.

The results for the first six months of 2011 have benefited from foreign exchange gains of $2,221,000 (2010 losses $3,061,000) arising as a result of a weakening US dollar against the Renminbi and Sterling.

Griffin has a 39.2% equity interest in Spitfire Oil Ltd (“Spitfire”). Griffin’s share of Spitfire’s profits of $28,000 (2010 losses $127,000) have been recognised in the interim results.

Interest receivable of $228,000 (2010 $149,000) was recorded in the period with Griffin holding substantial cash balances amounting to $74.7m as at 30th June 2011. This equates to 42.5 cents (26.5p) per share in issue. With no put options or any other form of hedging in place there were no gains or losses arising on the revaluation of financial instruments (2010 gains $201,000).

During the period, 5,040,000 shares were bought back on market for cancellation at a cost of $4,977,000.

At 30th June 2011, attributable net assets per share in issue amounted to 82 cents (62.5p) compared with 76 cents (47.5p) at 30th June 2010.

In line with previous years and the Company’s policy of determining annual dividends at the time of the Company’s full year results, the Board of Griffin has not declared an interim dividend.

Chairman’s Statement

Chairman Mladen Ninkov commented, “The half yearly results provide clear evidence of the progress which has been made at Caijiaying and the resulting benefits to Griffin and its shareholders. The potential of Caijiaying has only just begun to be tapped with the recently upgraded processing, increased throughput and stabilized metal prices. The Company expects to produce even better results in the second half of the year.

Nevertheless the Company continues to look to the future. Constant consideration is given to continuing to increase mining and throughput at Caijiaying. Work is well advanced towards making an application for a mining licence at the Zone II deposit, just over a kilometre to the south of the existing mine. Finally, investigations continue in evaluating tenements, mining operations and or mining companies which hold premium mining assets which could add significant shareholder value. The Company looks forward to progressing these possibilities for the benefit of its shareholders.”

Griffin Mining Limited
Condensed Consolidated Income Statement
(expressed in thousands US dollars)

  6 months to
30/06/2011
Unaudited
6 months to
30/06/2010
Unaudited
Year to
31/12/2010
Audited
  $000 $000 $000
       
Revenue 33,938 27,014 41,050
       
Cost of sales (13,087) (9,984) (16,780)
       
       
Gross profit 20,851 17,030 24,270
       
Net operating expenses (5,469) (5,829) (11,127)
       
       
Profit from operations 15,382 11,201 13,143
       
Share of profits / (losses) of associated company 28 (127) (109)
Foreign exchange gains / (losses) 2,221 (3,061) 38
Finance income 228 614 350
Finance (losses) (14) (2,224)
Other income 26 31 38
       
       
Profit before tax 17,871 8,658 11,236
       
Income tax expense (4,273) (1,809) (2,376)
       
       
Profit after tax 13,598 6,849 8,860
       
Attributable to non controlling interests 5,102 4,815 6,116
Attributable to equity share owners of the parent 8,496 2,034 2,744
  13,598 6,849 8,860
       
Basic earnings per share (cents) 4.79 1.12 1.51
       
Diluted earnings per share (cents) 4.65 1.10 1.49

 

Griffin Mining Limited
Condensed Consolidated Statement Of Comprehensive income
(expressed in thousands US dollars)

  6 months to
30/06/2011
Unaudited
6 months to
30/06/2010
Unaudited
Year to
31/12/2010
Audited
  $000 $000 $000
       
Profit for the financial period 13,598 6,849 8,860
       
Other comprehensive income      
       
Exchange differences on translating foreign operations 903 343 1,374
       
Other comprehensive income for the period, net of tax 903 343 1,374
       
Total comprehensive income for the period 14,501 7,192 10,234
       
Attributable to minority interests 5,452 4,831 6,218
Attributable to equity share owners of the parent 9,049 2,361 4,016
       
  14,501 7,192 10,234

 

Griffin Mining Limited
Condensed Consolidated Statement Of Financial Position
(expressed in thousands US dollars)

  30/06/2011 30/06/2010 31/12/2010
  Unaudited Unaudited Audited
  $000 $000 $000
       
ASSETS      
Non-current assets      
Property, plant and equipment 80,368 68,847 77,745
Intangible assets – Exploration interests 1,537 1,437 1,481
Investment in associated company 3,905 3,859 3,877
  85,810 74,143 83,103
Current assets      
Inventories 4,277 3,381 3,136
Other current assets 2,248 8,145 3,423
Cash and cash equivalents 74,652 67,070 66,450
  81,177 78,596 73,009
       
Total assets 166,987 152,739 156,112
       
EQUITY AND LIABILITIES      
Equity attributable to equity holders of the parent      
Share capital 1,755 1,815 1,804
Share premium 70,061 75,807 74,948
Contributing surplus 3,690 3,690 3,690
Share based payments 2,775 1,329 2,513
Other reserves 959 764 938
Foreign exchange reserve 9,011 7,556 8,480
Profit and loss reserve 56,127 47,075 47,631
Total equity attributable to equity holders of the parent 144,378 138,036 140,004
Minority interests 9,642 4,831 6,218
Total Equity 154,020 142,867 146,222
       
Non-current liabilities      
Long-term provisions 1,197 1,076 768
       
Current liabilities      
Taxation payable 2,939 1,018 1,011
Trade and other payables 8,831 7,778 8,111
       
Total liabilities 11,770 8,796 9,122
       
Total equities and liabilities 166,987 152,739 156,112
       
Number of shares in issue 175,501,830 181,538,496 180,408,496
       
Attributable net asset value / total equity per share $0.82 $0.76 $0.78

 

Griffin Mining Limited
Condensed Consolidated Statement of Changes in Equity
(expressed in thousands US dollars)

  Share
Capital
Share
Premium
Contributing
Surplus
Share
Based
Payments
Other
Reserves
Foreign
Exchange
Reserve
Profit
and loss
Reserve
Total attributable
to equity holders
of parent
Minority
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
                     
Issue of share capital 3 94 97 97
Purchase of shares for cancellation (5) (271) (276) (276)
Cost of share based payments 1,140 1,140 1,140
Transfer in respect of share based payments (4,601) 4,601
Transfer other current assets (2,616) (2,616)
Transaction with owners (2) (177) (3,461) 4,601 961 (2,616) (1,655)
                     
Retained profit for the 6 months 2,034 2,034 4,815 6,849
Other comprehensive income:                    
Exchange differences on translating foreign operations 5 322 327 16 343
Total comprehensive income for the 6 month period 5 322 2,034 2,361 4,831 7,192
                     
At 30 June 2010 (unaudited) 1,815 75,807 3,690 1,329 764 7,556 47,075 138,036 4,831 142,867
                     
Regulatory transfer for future investment 153 (153)
Purchase of shares for cancellation (11) (859) (870) (870)
Cost of share based payments 1,184 1,184 1,184
Transaction with owners (11) (859) 1,184 153 (153) 314 314
                     
Retained profit for the 6 months 709 709 1,301 2,010
Other comprehensive income:                    
Exchange differences on translating foreign operations 21 924 945 86 1,031
Total comprehensive income for the 6 month period – – 21 924 709 1,654 1,387 3,041
                     
At 31 December 2010 1,804 74,948 3,690 2,513 938 8,480 47,631 140,004 6,218 146,222
                     
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 262 262 262
Transfer other current assets (2,028) (2,028)
Transaction with owners (49) (4,887) 262 (4,674) (2,028) (6,702)
                     
Retained loss for the 6 months 8,496 8,496 5,102 13,598
Other comprehensive income:                    
Exchange differences on translating foreign operations 21 531 552 350 902
Total comprehensive income for the 6 month period 21 531 8,496 9,048 5,452 14,500
                     
At 30 June 2011 (unaudited) 1,755 70,061 3,690 2,775 959 9,011 56,127 144,378 9,642 154,020

 

Griffin Mining Limited
Condensed Consolidated Cash Flow Statement
(expressed in thousands US dollars)

  6 months to
30/06/2011
Unaudited
6 months to
30/06/2010
Unaudited
Year to
31/12/2010
Audited
  $000 $000 $000
Net cash flows from operating activities      
Profit before taxation 17,871 8,658 11,236
Share of associated company (profits) / losses (28) 127 109
Foreign exchange (gains) / losses (2,221) 3,061 (38)
Finance (income) (228) (614) (350)
Finance losses 14 2,224
Adjustment in respect of share based payments 262 1,140 2,323
Depreciation, depletion and amortisation 2,555 1,282 2,151
Provisions 455 333
(Increase) in inventories (1,141) (601) (356)
(Increase) in other current assets (867) (2,777) (747)
Increase in trade and other payables 719 3,111 3,445
       
Net cash inflow from operating activities 17,391 13,720 19,997
       
Taxation paid (2,346) (2,363) (2,936)
       
Cash flows from investing activities      
Interest received 228 148 350
Payments to acquire intangible fixed assets (21) (7) (10)
Payments to acquire tangible fixed assets (3,522) (6,501) (14,484)
Payments to acquire financial assets (2,238) (2,238)
Net cash (outflow) from investing activities (3,315) (8,598) (16,382)
       
Cash flows from financing activities      
Issue of ordinary share capital 41 97 97
Purchase of shares for cancellation (4,977) (276) (1,146)
  (4,936) (179) (1,049)
       
Dividends paid
       
Increase / (decrease) in cash and cash equivalents 6,794 2,580 (370)
       
Cash and cash equivalents at beginning of the period 66,450 67,630 67,630
Effects of exchange rate changes 1,408 (3,140) (810)
Cash and cash equivalents at end of the period 74,652 67,070 66,450

 

Griffin Mining Limited
Notes to the Interim Statement

1. These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31December2010.

2. Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company’s London office, 60 St James’s Street, London, SW1A 1LE.

3. The summary accounts set out above do not constitute statutory accounts as defined by Section 84 of the Bermuda Companies Act 1981 or Section 434 of the UK Companies Act 2006. The condensed consolidated statement of financial position at 31 December 2010 and the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the year then ended have been extracted from the Group’s 2010 statutory financial statements upon which the auditors’ opinion is unqualified.

4. 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 period. 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. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:

  6 months to
30/06/2011
Unaudited
6 months to
30/06/2010
Unaudited
Year to
31/12/2010
Audited
  Earnings

$000

Weighted
average
number of shares
Per share amount

(cents)

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 8,496 177,513,948 4.79 2,034 181,836,513 1.12 2,744 181,579,409 1.51
Dilutive effect of securities    
Options 5,385,543     2,602,749     2,648,124  
Diluted earnings per share 8,496 182,899,491 4.65 2,034 184,439,252 1.10 2,744 184,227,533 1.49