Unaudited interim results for the six months ended 30th June 2022

Highlights:

• Record second quarter zinc production and profitable second quarter.
• Revenues of $34.7 million (uninterrupted 6 months operations to 30^th June 2021: $54.1 million).
• Gross Profit of $15.5 million (uninterrupted 6 months operations to 30^th June 2021: $25.7 million).
• Profit before tax of $5.4 million (uninterrupted 6 months operations to 30^th June 2021: $15.5 million).
• Profit after tax of $3.0 million (uninterrupted 6 months operations to 30^th June 2021: $10.3 million).
• Basic earnings per share of 1.73 cents (uninterrupted 6 months operations to 30^th June 2021: 5.88 cents).

Financial and Trading:

The results for the six months to 30^th June 2022 were impacted by the suspension of operations at the Caijiaying Zinc Gold Mine imposed by the Chinese authorities in the period during, and leading up to, the Winter Olympics and Paralympics at Chong Li and the Chinese New Year Holidays.  From 1^st January 2022 to 23^rd March 2022 no stoping or underground development work was undertaken with processing not restarting until 25^th March 2022.

Whilst minimal ore was mined and processed in the first quarter of 2022, the second quarter to 30^th June 2022 saw the successful recommencement of operations with record ore mined, hauled and processed resulting in record zinc metal in concentrate production for a quarter since operations began at Caijiaying in June 2005.

Mining and processing have now reached the equivalent of over 1.3 million tonnes of ore per annum, all of which has been extracted from Zone III. Zone II has not yet been placed into production. 

Despite the suspension in operations in the first quarter of 2022, ore tonnes mined in the first half of 2022 were down only 22.9% on that mined in the first half of 2021 and tonnes processed in the first half of 2022 were down 29.0% on that achieved in the first half of 2021. Zinc metal in concentrate produced was down 32.3% on that achieved in the first half of 2021, gold in concentrate production was down 51.6% on that produced in the first half of 2021 and silver in concentrate production was down 44.3% on that produced in the first half of 2021.

With 338,039 tonnes (30^th June 2021 475,785 tonnes) of ore processed, metal in concentrate production in the first six months of 2022 was:

• 13,457 tonnes of zinc ( 30^th June 2021: 19,876 tonnes);
• 353 tonnes of lead (30^th June 2021: 561 tonnes);
• 80,717 ounces of silver (30^th+ June 2021: 144,705 ounces); and
• 3,672 ounces of gold (30^th June 2021: 7,584 ounces).

The results benefited from a significant improvement in the market price for zinc with the average price received for zinc metal in concentrate increasing by 31.9% from $2,209 per tonne in the first six months of 2021 to $2,914 per tonne in the first half of 2022.  Zinc revenues before royalties and resource taxes in the six months to 30^th June 2022 were $31,234,000 (30^th June 2021 – $42,102,000).  Lead and precious metals revenues were $5,735,000 (30^th June 2021 – $15,136,000), with the average gold price received of $1,788 per oz (30^th June 2021 – $1,675) and silver $18.1 per oz (30^th June 2021 – $20.4).  Metal in concentrate with a potential sales value of over $9m remained unsold at 30^th June 2022.

During the six months to 30^th June 2022:

• 10,719 tonnes of zinc metal in concentrate were sold (30^th June 2021 : 19,876ozs);
• 2,491 ozs of gold in concentrate were sold (30^th June 2021 : 6,919 ozs); and
• 44,627 ozs of silver in concentrate were sold (30^th June 2021 : 129,990 ozs).

With operations suspended in the first quarter of 2022, costs of sales (mining, haulage and processing) fell by 32.1% from that in the first six months of 2021. Costs of sales in the second quarter of 2022  were in line with that in the second quarter of 2021 despite increased ore mined and hauled..

Administration costs were marginally reduced with a reduction in charges from Griffin’s Chinese joint venture partners based upon the profits of Hebei Hua Ao. Otherwise, additional costs were incurred with the appointment of 3 new directors with their associated directors fees, Mr Clive Whiley’s appointment as a consultant to the company with his associated consulting fees, annual bonuses awarded by the directors to Keynes Capital and the Finance Director, increased directors and officers liability insurance premiums and the resumption of corporate travel. With the suspension in operations in the first quarter administration costs were contained at Hebei Hua Ao.

Basic earnings per share were 1.73 cents (30^th June 2021: 5.88 cents per share).  At 30^th June 2022, attributable net assets per share amounted to 149 cents (30^th June 2021: 141 cents).

With the suspension in operations in the first quarter of 2022 cash flows used in operations in the period amounted to $4,122,000 (the cash flow generated in the period to 30^th June 2021 was $16,818,000). The Griffin Mining Group of companies remains free of any bank loans.

Chairman’s Statement

Chairman Mladen Ninkov commented, “What an amazing performance, yet again, by the staff, contractors and orebody at Caijiaying. They all continue to deliver outstanding results, even more impressive in light of the unique environment of generally no operations at Caijiaying during the whole of the 1^st quarter and to then come back in the 2^nd quarter with record ore mined, hauled and processed, resulting in record zinc metal in concentrate production for any quarter since operations began in June 2005. If anything further needed to be added to that performance, the equivalent of over 1.3 million tonnes of ore on an annualised basis was being mined and processed, all from Zone III. This is without any contribution yet from Zone II. I couldn’t be prouder or happier with the Griffin Team and it augurs extraordinarily well for the Company in the second half of 2022 and into 2023.”

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

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