LONDON (Alliance News) - Griffin Mining Ltd Thursday said its pretax profit fell in 2014 after revenue was "severely impacted" by the suspension of operations for three months in the second half of the year.
The operator of the Caijiaying zinc and gold mine in China said its pretax profit fell to USD1.0 million in 2014 from a USD13.2 million profit in 2013. Revenue dropped to USD43.6 million from USD71.1 million after production fell across the board due to the temporary suspension.
Between August 11 and November 18, the mine was suspended to facilitate the upgrade of the processing facilities and the subsequent ramp up on re-commissioning those facilities. As a result, the amounts of ore processed and metals in concentrate produced and sold were significantly down on previous years.
During the year, Griffin produced 25,901 tonnes of zinc metal in concentrate compared to 39,724 tonnes a year earlier, whilst gold in concentrate production fell to 7,623 ounces from 11,468 ounces. Silver in concentrate production fell to 201,982 ounces from 323,808 ounces and lead in concentrate production dropped to 857 tonnes from 1,551 tonnes.
The fall in production was partially offset by better zinc, gold and silver prices. Average achieved zinc prices rose by 3.3% year-on-year to USD1,345 per tonne from USD1,302, silver prices rose 18% to USD17.1 per ounce from USD16.8, and gold prices increased by 1.5% to USD1,251 an ounce from USD1,233. Zinc prices fell in 2014 by 2.4% to USD1,595 per tonne from USD1,633.
The company's results also were hurt by increased operating costs, which rose 9.6% to USD13.5 million from USD12.3 million due to inflationary cost increases in China and non-cash share option charges.
"Although the company remained profitable for its 10th consecutive year, it will come as no surprise that the 2014 production and financial results were substantially below the previous year's almost solely due to the three-month shutdown of the processing facilities at the Caijiaying Mine," said Chairman Mladen Ninkov.
Griffin shares were down 7.0% to 30.00 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Griffin Mining (GFM)