Griffin Mining Regulatory News (GFM)

9 May 2005 07:00

Griffin Mining Ld09 May 2005 GRIFFIN MINING LIMITED9 MAY 2005 GRIFFIN MINING LIMITED PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 Griffin Mining Limited ("Griffin" or the "Company") has today published itsresults for the year ended 31 December 2004. The Company recorded a profit for the year to 31 December 2004 of $398,000compared to a loss of $20,000 in 2003. Foreign exchange gains of $939,000 were achieved on foreign currency deposits in2004 compared to $476,000 in 2003, whilst interest income increased to $507,000in 2004 compared to $90,000 in 2003. Operating costs in 2004 increased to$1,048,000 (2003 $586,000) as a result of increased activity with thedevelopment of the Caijiaying zinc gold mine in China. Shareholders' fundsincreased from $13,365,000 at 31 December 2003 to $29,336,000 at 31 December2004, with the benefit of the profit for the year, a placing of 35,000,000 newordinary shares, and the exercise of options and warrants over 7,100,000 newordinary shares, to raise a total of $15,630,000 after expenses. With completionof these capital raisings, which fully fund construction of Griffin's zinc goldmine and processing facilities at Caijiaying, exploration and development costsincurred to date of $6,419,000 have been reclassified as tangible fixed assetsin accordance with International Financial Reporting Standards. Furtherexpenditure of $10,037,000 was incurred in constructing the mine and processingfacilities to 31 December 2004. Dry commissioning has now commenced andconstruction costs are in line with that estimated in the feasibility studyproduced in August 2003. Mladen Ninkov, Chairman commented as follows: After a long, arduous and frantic 7 years, having weathered the doom merchantsand scaremongers, the Company stands ready to deliver on its promises withcompletion of construction of the Caijiaying processing facilities and thedevelopment of the underground mine workings at Caijiaying. As we go to press,dry commissioning has begun at Caijiaying and, by the time of the Annual GeneralMeeting of the Company, full production should have commenced. To ourknowledge, Caijiaying will be the first foreign owned and built, new hard rockmining operation in China in over 100 years. The last 7 years have shown management to have made some significant andpositive decisions. The Company now has a project almost in production with nodebt on its balance sheet, no hedging commitments and substantial cash balances.This is a unique and extremely strong financial position for the Company tofind itself in. The Company is not hampered by penury commercial bankcovenants, nor the need to pay interest on any debt and has not been hamstrungby the obligation to sell forward its base and precious metals production.Significantly, the Company was able to avoid the need to appoint an EPCMcontractor to build the Caijiaying facilities on a "fixed price" contract basis,a usual requirement of bank financing. Instead the Company itself hascontrolled the building of Caijiaying due to its strong balance sheet position.The cost savings to shareholders have been substantial. This does not mean, of course, that the Company will rest on its laurels. TheCompany operates on the well known expression, "If you are not moving forwards,then you are moving backwards." However, unlike so many other mining companies,the success of Caijiaying will not be dissipated by leveraging into an unwiseacquisition or joint venture. Caijiaying still has enormous, untappedpotential. In the first instance, the Company will immediately start examining theviability of expanding its production to 150% of its planned first yearthroughput. That will be a primary focus of the Company. Secondly, a hugeamount of ground within the Company's licence areas at Caijiaying require bothprimary and secondary exploration for precious and base metals. That alsoremains another primary focus of the Company. Thirdly, the Company willcontinue to investigate, conduct due diligence and make calculated decisions onany future mining acquisitions. These may occur anywhere the managementbelieves it can find extraordinary value with a project which can weather acommodities downturn and provide the necessary shareholder returns. Inevitably,our first country of interest has been, and will remain, China. Although wehave examined many acquisitions in China, none has yet met the mining,metallurgical and financial criteria we have set for the Company. The Companyremains optimistic that such a project will be offered in due course followingthe commissioning of Caijiaying. Further information Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772Roger Goodwin - Finance DirectorGriffin Mining Limited Philip Davies Telephone: +44(0)20 7953 2000Charles Stanley & Company Limited Griffin Mining Limited's shares are quoted on the Alternative Investment Market (AIM) of the London Stock Exchange (symbol GFM). The Company's news releases are available on the Company's web site: www.griffinmining.com CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNTFor the year ended 31 December 2004 (expressed in thousands US dollars) 2004 2003 $000 $000 Turnover - -Cost of sales - - ----------- -----------Gross Profit - - Net operating expenses (1,048) (586) ----------- ----------- Operating (loss) (1,048) (586) Foreign exchange gains 939 476Interest receivable and similar income 507 90 ----------- -----------Profit / (Loss) on ordinary activities before taxation 398 (20) Taxation on profit / (loss) on ordinary activities - - ----------- -----------Profit / (Loss) for the financial year 398 (20) ----------- ----------- Earnings / (Loss) per share (cents) 0.23 (0.02) ====== ====== CONSOLIDATED SUMMARISED BALANCE SHEETAs at 31 December 2004 (expressed in thousands US dollars) 2004 2003 $000 $000Non-current assetsIntangible assets - exploration interests 39 6,285Tangible assets - mineral interests 11,770 -Tangible assets - plant and equipment 5,109 171Tangible assets - other 15 3 ----------------- ----------------- 16,933 6,459 ----------------- -----------------Current assetsPortfolio investments 27 62Accounts receivable 108 33Prepaid expenses 168 66Cash and deposits 12,985 6,831 ----------------- ----------------- 13,288 6,992Current liabilities: Amounts falling due within one yearCreditors and accrued expenses (885) (86) ----------------- ----------------- Net current assets 12,403 6,906 ----------------- ----------------- Total net assets 29,336 13,365 ========= =========Capital and reservesShare capital 1,773 1,352Share premium 36,594 21,385Contributing surplus 3,690 3,690Investment revaluation reserve (846) (811)Foreign exchange reserve (143) (121)Profit & loss account (11,732) (12,130) ----------------- -----------------Shareholders equity interests 29,336 13,365 ========= =========Number of shares in issue 177,327,731 135,227,731 Attributable net asset value per share $0.17 $0.10 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the year ended 31 December 2004 (expressed in thousands US dollars) 2004 2003 $000 $000 Profit / (Loss) for the financial year 398 (20) Unrealised (losses) / gains on investments (35) 33 Currency translation differences in foreign currency netinvestments (22) (133) ---------------- ----------------Total gains and losses recognised in the year 341 (120) ========= ========= Losses and profits for the financial year are the same as those on an historicalcost basis. CONSOLIDATED SUMMARISED CASH FLOW STATEMENTFor the year ended 31 December 2004 (expressed in thousands US dollars) 2004 2003 $000 $000 Net cash inflow / (outflow) from operating activities 611 (227) --------------- ---------------Investing activities Interest received 507 90Payments to acquire intangible fixed assets (557) (760)Payments to acquire tangible fixed assets - mineral interests (5,082) -Payments to acquire tangible fixed assets - plant and equipment (4,938) (171)Payments to acquire tangible fixed assets - other (17) (2) --------------- ---------------Net cash (outflow) from investing activities (10,087) (843) --------------- --------------- Net cash (outflow) before financing (9,476) (1,070) --------------- ---------------FinancingIssue of ordinary share capital 16,391 6,452Expenses paid in connection with share issue (761) (288) --------------- --------------- 15,630 6,164 --------------- --------------- Increase in cash and cash equivalents 6,154 5,094 ======== ========Reconciliation of operating (loss) to net cash inflow / (outflow)from operating activitiesOperating loss (1,048) (586)Depreciation 5 1(Increase) in debtors (177) (76)Increase / (decrease) in creditors 799 (1)Exchange differences 1,032 435 --------------- --------------- 611 (227) ======== ======== Notes: 1. This statement has been prepared using accounting policies andpresentation consistent with those applied in the preparation of the statutoryaccounts of the Company. 2. The summary accounts set out above do not constitute statutory accountsas defined by Section 84 of the Bermuda Companies Act 1981 or Section 240 of theUK Companies Act 1985. The summarised consolidated balance sheet at 31 December2004 and the summarised consolidated profit and loss account, summarisedconsolidated cash flow statement and summarised statement of total recognisedgains and losses for the year then ended have been extracted from the Group's2004 statutory financial statements upon which the auditors' opinion isunqualified. The results for the year ended 31 December 2003 have been extractedfrom the statutory accounts for that period, which contain an unqualifiedauditors' report. 3. The annual report and accounts for 2004 together with the notice of theAnnual General Meeting to be held on 10 June 2005 are being sent by post to allregistered shareholders. Additional copies of the annual report and accountsare available from the Company's London office, 6th Floor, 60 St James's Street,London, SW1A 1LE. 4. Earnings per share have been calculated on the basis of the net profitafter taxation of US$398,000 (loss US$20,000 in 2003) and the weighted averagenumber of shares in issue in the year ended 31 December 2004 of 170,646,361(114,682,774 in 2003). There is no material dilutive effect of share purchaseoptions. 5. Reconciliation of movements in shareholders' funds 2004 2003 $000 $000 Total gains and (losses) recognised in the year 341 (120)Issue of ordinary shares in the year 15,630 6,164 --------------- ---------------Net additions to shareholders' funds 15,971 6,044Opening shareholders' funds 13,365 7,321 --------------- ---------------Closing shareholders' funds 29,336 13,365 ======== ======== This information is provided by RNS The company news service from the London Stock Exchange