Griffin Mining Regulatory News (GFM)

16 May 2006 07:00

Griffin Mining Ld16 May 2006 16th MAY 2006 PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 Griffin Mining Limited ("Griffin" or "the Company") has today published itsresults for the year ended 31 December 2005. Highlights: • Successful commissioning of the Caijiaying Zinc-Gold mine in China in July 2005 • First profit from operations in 2005 of US$426,000 (2004 loss restated US$1,557,000), and a consolidated profit for the year of US$311,000 (2004 loss restated US$111,000) • Operating profit of US$1,283,000 in the six months to 31 December 2005 • Significant increases in production and recovery rates • Ongoing exploration programme to investigate further zinc and gold mineralisation • Continued evaluation of further economically justifiable acquisitions Chairman's statement: The Company has successfully developed, built, commissioned and now operatesvery profitably, the Caijiaying Zinc-Gold mine in the People's Republic of China(the "PRC"). This is a landmark achievement for the Company, the mining industryand the PRC. At Company level, the Caijiaying mining operations guarantee the long-termfinancial success of Griffin. This financial success has been even furtherenhanced by the dramatic rise in the price of commodities, and in particular,the extraordinary rise in the price of zinc. The Company's feasibility study wascommissioned using a US$760 a tonne zinc price. Knowing that mining isessentially a fixed cost business, next year's financial statements shouldadmirably exhibit what a zinc price of US$3,300 a tonne can do for the financialperformance of the Company. Of course, this is just the beginning. With no debt on the balance sheet, nohedging commitments and a fully built and operating processing plant atCaijiaying located adjacent to a long life ore body, the financial future of theCompany has been well secured. However, the Company remains fully focused ongenerating even greater returns for its shareholders. This will be achieved inthree major ways: 1. A continuing drive to expand the throughput and, ipso facto, the amount of zinc metal being generated by the Caijiaying processing facilities. The plant was designed and built to process 200,000 tonnes of ore per annum. Within seven months, the Company has already increased throughput by 50% and is currently processing approximately 300,000 tonnes of ore on an annualised basis. A striking achievement by the Company. Needless to say, the Company continues to drive to increase throughput even further. 2. As evidenced by the announcements made by the Company during the year, the exploration potential of the greater Caijiaying area improves every day as we seek to discover the mysteries that Mother Nature has hidden beneath the surface. As this is written and spring rears its head, an RC drill rig has been mobilized at Caijiaying to begin drilling the epithermal gold targets south of Zone II. Furthermore, the Company has approved the driving of another decline into Zone II, from the base of which the Company has commissioned a significant underground drilling programme to investigate further zinc and gold mineralisation. The Company has every hope that Zone II will become a second mine for the Company and an alternative source of ore for the Caijiaying processing plant. 3. The Company continues to investigate and evaluate further potential acquisitions. That process has become substantially more difficult by the buoyancy of the commodities market which has filtered through to the financing of a large number of marginal and uneconomic mineral deposits. This will, inevitably, end in tears. In the interim, it has made the acquisition of any worthwhile project, of which there are very few, prohibitively expensive and incapable of being economically justified. The Company continues to move forward on a number of projects which will only be consummated if they display the risk reward profile required to generate the returns expected by the shareholders of the Company. My hope is that the Company has repaid the loyalty, patience and financialcommitment of its shareholders over the past eight years. The Company has, andwill continue, to strive to do even better. Mladen Ninkov Chairman 16th May 2006 Further information Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772Roger Goodwin - Finance DirectorGriffin Mining Limited Andrew Smith / Martin Eales Telephone: +44(0)20 7523 8350Collins Stewart Limited Hugo de Salis Telephone: +44(0) 20 7242 4477St Brides Media & Finance Ltd 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 Consolidated Income Statement For the year ended 31 December 2005 (expressed in thousands US dollars) 2005 2004 Restated $000 $000 Revenue 6,120 -Cost of sales (2,440) - Gross Profit 3,680 -Net operating expenses (3,254) (1,557) Profit / (loss) from operations 426 (1,557)Foreign exchange (losses) / gains (411) 939Finance income 296 507 Profit / (loss) before tax 311 (111) Income tax expense - - Profit / (loss) after tax attributable to equity share owners for the financial 311 (111)year Basic and diluted earnings / (loss) per share (cents) 0.17 (0.07) Griffin Mining Limited Consolidated Balance Sheet As at 31 December 2005 (expressed in thousands US dollars) 2005 2004 Restated $000 $000ASSETSNon-current assetsProperty, plant and equipment 27,070 16,894Intangible assets - Exploration interests 419 39 27,489 16,933Current assetsInventories 1,620 -Other current assets 947 276Available-for-sale financial assets 63 27Cash and cash equivalents 6.663 12,985 9,293 13,288 Total assets 36,782 30,221 EQUITY AND LIABILITIESEquity attributable to equity holders of the parentShare capital 1,838 1,773Share premium 39,040 36,594Contributing surplus 3,690 3,690Share based payments 842 509Investment revaluation reserve - -Foreign exchange reserve 215 (143)Profit and loss reserve (12,740) (13,087)Total equity 32,885 29,336 Non-current liabilitiesLong-term provisions 372 - Current liabilitiesTrade and other payables 3,525 885 Total liabilities 3,897 885 Total equities and liabilities 36,782 30,221 Number of shares in issue 183,827,731 177,327,731 Attributable net asset value / total equity per share $0.18 $0.17 Griffin Mining Limited Consolidated Statement of Changes in Equity For the year ended 31 December 2005 (expressed in thousands US dollars) Share Share Contributing Share Investment Foreign Profit Total capital Premium surplus based revaluation Exchange and payments reserve Reserve loss $000 $000 $000 $000 $000 $000 $000 $000 At 31 December 2003 1,352 21,385 3,690 - (811) (121) (12,130) 13,365Exchange differences - - - - - (22) - (22)on translatingforeign operationsLoss for the year - - - - - - (111) (111)Movement in fair (35) (35)value of financialassetsIssue of share 421 15,209 - - - - - 15,630capitalCost of share based - - - 509 - - - 509paymentsTransfer - - - - 811 - (811) - At 31 December 2004 1,773 36,594 3,690 509 - (143) (13,087) 29,336Exchange differences - - - - - 358 - 358on translatingforeign operationsProfit for the year - - - - - - 311 311Movement in fair 36 36value of financialassetsIssue of share 65 2,446 - - - - - 2,511capitalCost of share based - - - 333 - - - 333payments At 31 December 2005 1,838 39,040 3,690 842 - 215 (12,740) 32,885 Griffin Mining Limited Consolidated Cash Flow Statement For the year ended 31 December 2005 (expressed in thousands US dollars) 2005 2004 Restated $000 $000 Net cash flows from operating activitiesProfit/(loss) before taxation 311 (111)Foreign exchange losses 360 93Finance income (296) (507)Adjustment in respect of share options 333 509Depreciation, depletion and amortisation 557 5Increase in inventories (1,620)(Increase) in other current assets (671) (177)Increase in trade and other payables 2,640 799 Net cash inflow from operating activities 1,614 611 Cash flows from investing activities Interest received 296 507Payments to acquire intangible fixed assets (376) (557)Payments to acquire tangible fixed assets - mineral interests (6,949) (5,082)Payments to acquire tangible fixed assets - plant and equipment (3,409) (4,938)Payments to acquire tangible fixed assets - other (9) (17)Net cash (outflow) from investing activities (10,447) (10,087) Cash flows from financing activitiesIssue of ordinary share capital 2,511 16,391Expenses paid in connection with share issue - (761) 2,511 15,630 Increase/(decrease) in cash and cash equivalents (6,322) 6,154 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 December2005 and the summarised consolidated income statement, consolidated statement ofchanges in equity and the summarised consolidated cash flow statement for theyear then ended have been extracted from the Group's 2005 statutory financialstatements upon which the auditors' opinion is unqualified. The results for theyear ended 31 December 2004 have been extracted from the statutory accounts forthat period, which contain an unqualified auditors' report. 3. Griffin has applied International Financial Reporting Standards (IFRS) toits 2005 accounts in full. The adoption of revised IFRS2, covering share basedpayments, has resulted in a charge to profit in 2005 of $333,000 and anadjustment to the 2004 results for a charge to profit and loss of $509,000. Theadoption of revised International Accounting Standard 39 covering financialinstruments has resulted in gains of $36,000 (2004 losses $35,000) beingrecognised in respect of the Company's marketable securities held for investmentbeing taken to equity. 4. The annual report and accounts for 2005 together with the notice of theAnnual General Meeting to be held on 16 June 2006 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. 5. The calculation of the basic earnings/(loss) per share is based on theearnings attributable to ordinary shareholders divided by the weighted averagenumber of shares in issue during the year. The calculation of diluted earningsper share is based on the basic earnings per share on the assumed conversion ofall dilutive options and other dilutive potential ordinary shares.Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below: 2005 2004 Earnings Weighted Per share Loss Weighted Per share average amount average number amount $000 number of $000 of shares shares (cents) (cents)Basic earnings/(loss)per shareEarnings attributable 311 180,639,032 0.17 (111) 170,646,361 0.07to ordinaryshareholdersDilutive effect ofsecuritiesOptions 3,677,894 -Diluted earnings/(loss) 311 184,316,926 0.17 (111) 170,646,361 0.07per share This information is provided by RNS The company news service from the London Stock Exchange