LONDON (Alliance News) - Griffin Mining Ltd on Thursday said it swung to a pretax loss in its first half after both revenue and profit levels were "severely impacted" by a five-month suspension of mining and the Chinese New Year holidays.
The China-focused miner posted a pretax loss of USD4.1 million for the six months ended June 30, compared to the USD3.7 million pretax profit reported for the same period a year earlier, as revenue declined to USD20.8 million from USD35.2 million.
Griffin said it took a heavy blow from the suspension of its mining operations until January 22, following a fatality at the Caijaying mine in October, as well as the disruption caused by the Chinese New Year holidays in February.
The two factors meant there was a lack of ore and low-grade ore to process in the first quarter, Griffin said, noting that revenue also was hit by relatively low commodity prices in the first quarter. In the second quarter, however, Griffin said there was an increase in the amount of ore mined and consequently processed, whilst commodity prices rose.
In total over the first half, 14% less ore was hauled to the surface, which resulted in a throughput of 365,337 tonnes of ore, 13% below the 418,950 tonnes achieved for the same period a year earlier.
"The interim results, although by their very nature disappointing, need to be understood in the context of the short and long term consequences of the five-month shutdown caused by the death of a contractor at Caijiaying in late 2015. The cessation of operations not only ceased mining, processing, production, revenues and profits, but also prevented underground clean-up activities and vital capital development to be undertaken in the down period," said Chairman Mladen Ninkov.
"The effects of the shutdown were being felt, both operationally and financially, until June of this year. Barring any further extraneous events, the second half of 2016 is expected to return to normality and, with higher commodity prices, the company is confident of a very acceptable second half year period," the chairman added.
Shares in Griffin were down 4.9% at 34.70 pence on Thursday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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Griffin Mining (GFM)