(Alliance News) - Griffin Mining Ltd said Monday its interim profit more than halved in the first half of 2019 on falling zinc metal prices and higher smelter treatment charges.
For the six months to the end of June, the miner and investment firm reported a pretax profit of USD6.3 million, down 70% from USD21.3 million the year before, on revenue that declined by 29% to USD38.6 million from USD54.1 million.
Operationally, Griffin Mining produced 9,099 ounces of gold during the period, down 4.1% from 9,492 ounces the year before. Zinc production fell 1.1% year-on-year to 16,692 tonnes from 16,873 tonnes, however silver production rose 6.5% to 141,306 ounces from 132,689 ounces. The production of lead increased by 7.6% to 494 tonnes from 459 tonnes the prior year.
Revenue from zinc metal in concentrate dropped by 36% to USD27.2 million from USD42.6 million, as the average price of zinc fell by 37% to USD1,591 per tonne from USD2,522.
Lead and precious metals revenue also declined by 7.1% to USD13.0 million from USD14.0 million, with less gold in concentrate sold.
"Although all stakeholders in the company will be disappointed with the financial results for the first half of 2019, they are directly, and practically solely, attributable to the fall in the zinc price and the tremendously higher smelter treatment charges in the first six months of the year," said Chair Mladen Ninkov.
"Operations and metal production were generally in line with budget. As is often said, mining is a fixed cost business and, as such, a reduction is sales revenues has a direct and significant effect on the margin of profit. We continue to hope for a higher zinc price and lower treatment charges for 2019 into 2020," Ninkov added.
Shares in Griffin Mining were down 4.1% at 86.75 pence on Monday in London.
Griffin Mining (GFM)