Griffin Mining Regulatory News (GFM)

60 St James's Street, London SW1A 1LE, United Kingdom

Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773

E mail: griffin@griffinmining.com

3rd September 2014

INTERIM STATEMENT

for the six months ended 30th June 2014

Below are the interim results for Griffin Mining Limited ("Griffin" or "the Company") for the six months ended 30th June 2014.

Highlights:

· Revenues of $33.2 million (2013: $33.7 million)

· Operating profit of $9.2 million (2013: $7.3 million)

· Profit before tax of $7.4 million (2013: $5.8 million)

· Profit after tax of $5.4 million (2013: $4.0 million)

Financial and Trading:

Throughput of 408,671 tonnes of ore in the six months to the 30th June 2014 at Griffin's Caijiaying Mine was in line with that achieved of 412,799 tonnes in the six months to 30th June 2013, resulting in metal in concentrate production of:

· 19,147 tonnes of zinc (2013: 19,077 tonnes);

· 609 tonnes of lead (2013: 903 tonnes);

· 147,901 ounces of silver (2013: 151,921 ounces); and

· 5,999 ounces of gold (2013: 3,869 ounces).

Metal in concentrate production in the six months to 30th June 2014 compared to that in the six months to 30th June 2013 was 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.

Revenues in the six months to 30th June 2014 were down 1.2% on that achieved in the first six months of 2013 with less zinc, lead and silver in concentrate sold, whilst more gold was sold at lower prices.

Operating costs and expenses were down on that incurred in the six months to 30th June 2014 following the appointment of a new management team at Caijiaying with savings achieved across most areas of operations.

Profits before tax were impacted by: Foreign exchange losses of $26,000 (2013: $20,000) arising from a weaker Renminbi offset by gains on Sterling deposits against the US dollar in the period; interest payable on Chinese bank loans of $1,629,000 (2013: $1,577,000); finance lease interest of $411,000 (2013: $nil); interest receivable of $126,000 (2013: $59,000); and other income of $62,000 ( 2013: $33,000).

Chinese income taxes and withholding taxes of $1,754,000 (2013: $1,724,000) and deferred taxation of $255,000 (2013: $nil) have been charged to profit resulting in profits after tax of $5,350,000 (2012: $4,035,000).

Provision of $1,601,000 (2013: $584,000) has been made for the minority interests in the profit of Griffin's Chinese subsidiary, Hebei Hua Ao Mining Industry Company Limited ("Hua Ao"). Profit attributable to Griffin amounted to $3,749,000 (2013: $3,451,000).

Basic earnings per share were 2.09 cents (2013: 1.97 cents) and diluted earnings per share 2.09 cents (2013: 1.95 cents). At 30th June 2014, attributable net assets per share on issue amounted to 84 cents (2013: 81 cents).

Funds continue to be repatriated from China to cover central costs whilst leaving sufficient working capital within Hua Ao for the upgrade of the processing facilities and the further development of the Caijiaying mine. During the period: $6,548,000 was expended on mine development and plant upgrade work; $2,072,000 of bank loans in China were repaid; whilst cash balances throughout the Group have decreased by $2,519,000 (2013: $7,740,000 increase).

Administrative state issues in China outside the Company's control continue to delay the grant of a new mining licence over the unmined Zone III deeps, Zone II and adjacent areas at Caijiaying. Despite this delay, work is continuing with the upgrade of the processing facilities and underground development to increase throughput capacity to 1.5 million tonnes of ore per annum. Considerable progress has been made to date with the above ground work expected to be completed by the end of October. Whilst the mining and haulage of ore has continued unabated during the expansion, the processing of ore has been suspended since 12th August for a scheduled 2 month period. Once the expanded processing capacity has been commissioned, it is expected that the stockpiled ore will be processed and the annual budgeted production targets met by year end. 

In line with previous years practice and the Company's policy of determining annual dividends at the time of the Company's full year results, no interim dividend has been declared by the Board of Griffin.

Chairman's Statement

Chairman Mladen Ninkov commented, "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 with all the benefits that will ensue in the future with the predicted rise in the zinc price. Added to these positive results is the further good news of the doubling of our processing capacity in the near future from 750,000 tonnes per annum to 1.5 million tonnes per annum. All these factors point to 2015 being a watershed year for the Company."

Griffin Mining Limited

Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772

Roger Goodwin - Finance Director

Panmure Gordon (UK) Limited Telephone: +44 (0) 20 7459 3600

Dominic Morley

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

Griffin Mining Limited

Condensed Consolidated Income Statement

(expressed in thousands US dollars)

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

Griffin Mining Limited

Condensed Consolidated Statement of Changes in Equity

(expressed in thousands US dollars)

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

Griffin Mining Limited

Notes to the Interim Statement

1. These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2013.

2. Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company's London office, 60 St James's Street, London, SW1A 1LE.

3. The summary accounts set out above do not constitute statutory accounts as defined by Section 84 of the Bermuda Companies Act 1981 or Section 434 of the UK Companies Act 2006. The condensed consolidated statement of financial position at 31 December 2013 and the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the year then ended have been extracted from the Group's 2013 statutory financial statements upon which the auditors' opinion is unqualified.

4. The summary accounts have been prepared on a going concern basis. As at 30th June 2014, Hebei Hua Ao (a subsidiary of the Company) had bank loans outstanding of $47,133,000. Having previously rolled over each of the bank facilities Hebei Hua Ao expects to roll over the existing facilities for a further 12 months. Having considered the cash resources, banking facilities and forecasts for the remainder of the Hebei Hua Ao joint venture term, the directors do not expect any going concern issues to arise.

5. The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The calculation of diluted earnings per share is based on the basic earnings per share on the assumed conversion of all dilutive options and other dilutive potential ordinary shares. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:

6. A prior year adjustment of $1,316,000 has been charged to profit and loss reserve, and deferred taxation in respect of financial periods to 31st December 2010. The impact of this is reflected in the statement of changes in equity and deferred taxation set out below. The Statement of Financial Position at 30th June 2013 has been restated to reflect this. This charge relates to deferred taxation at 25% on accelerated depreciation for Chinese tax purposes during which time Hebei Hua Ao enjoyed advantageous tax rates in the PRC tax.