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LONDON (Alliance News) - Griffin Mining Ltd Wednesday announced increases in profit for the first half after cutting costs at its Caijiaying mine, located north west of Beijing.
Griffin had a pretax profit of USD7.4 million in the six months to June 30, compared to USD5.8 million in the comparable period in 2013, despite revenue declining 1.2% to USD33.2 million from USD33.7 million achieved in the first six months of 2013. Revenue was impacted by less zinc, lead and silver in concentrate sold, whilst more gold was sold at lower prices, it said.
"These are very pleasing results with a 26% increase in operating profit and a 35% increase in net profit with no real change in revenues. In effect, this means that management has been able to successfully implement real, substantial cuts in costs at Caijiaying," said Chairman Mladen Ninkov in a statement.
Griffin's cost of sales in the six months to June 30 were down to USD18.2 million from USD20.5 million in the same period a year earlier, following the appointment of a new management team at Caijiaying with savings achieved across most areas of operations, it added.
Griffin's production at Caijiaying Mine was slightly down to throughput of 408,671 tonnes of ore in the first half of 2014 compared to 412,799 tonnes a year earlier, impacted by lower lead and silver grades but better gold grades and recoveries.
Zinc grades were marginally better with recoveries in line with previous years, Griffin said. The company will see "benefits that will ensue in the future with the predicted rise in the zinc price," said Ninkov.
The Caijiaying Mine remains closed as the company continues to expand the site and upgrade processing facilities and underground developments to double throughput capacity to 1.5 million tonnes of ore per annum. Chinese government administrative issues continued to delay the grant of a new mining licence over the additional mines in adjacent areas at Caijiaying, Griffin said.
"Added to these positive results is the further good news of the doubling of our processing capacity in the near future," Chairman Ninkov said. "All these factors point to 2015 being a watershed year for the company."
No interim dividend was declared by the company due to its policy of determining annual dividends at the time of the company's full year results.
Griffin's shares were down 0.2% to 39.05 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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