Griffin Mining upbeat on strong first half
By Josh White
Date: Thursday 12 Sep 2024
(Sharecast News) - Griffin Mining reported strong first-half financial results on Thursday, with revenues rising 23.3% to $85.7m, compared to $69.5m in the same period in 2023.
The AIM-traded company said gross profit more than doubled to $38.5m, while operating profit surged to $19.7m, up from $9.1m in the prior year.
Profit before tax increased to $20.5m, and profit after tax reached $11.3m, more than double the $5.2m reported in the first half of last year.
Basic earnings per share also rose significantly to 5.93 cents, compared to 2.77 cents in 2023.
Griffin said its mining operations remained steady, processing 736,010 tonnes of ore and producing 26,202 tonnes of zinc, 731 tonnes of lead, 164,781 ounces of silver, and 11,307 ounces of gold.
Despite a slight decline in zinc ore grades, the firm said it benefited from higher gold and silver grades, as well as increased gold prices.
Zinc recoveries were marginally down, but gold and silver recoveries improved compared to the first half of 2023.
Sales of zinc, gold, silver, and lead also increased, with 25,653 tonnes of zinc, 11,257 ounces of gold, 162,202 ounces of silver, and 714 tonnes of lead sold during the period.
Revenue from zinc rose to $59.97m, while revenue from lead and precious metals grew substantially to $30.48m, up from $18.18m in 2023.
Griffin said its cost management efforts were effective, with a 1% reduction in costs of sales, despite a 5.8% increase in ore mined.
However, administration costs rose by 37%, reflecting bonuses tied to achieving throughput targets and charges related to the company's share incentive scheme.
The company saw increased interest income due to a rise in bank deposits, reaching $0.83m in the first half, up from $0.57m in 2023.
Despite spending $11.7m on share buybacks, Griffin said it maintained healthy cash reserves of $65.25m as of 30 June.
Mine development and capital expenditures also grew slightly, with $10.6m invested in the ongoing development of the zone two area at the Caijiaying mine, which was expected to start production next year.
A higher-than-expected tax charge of $9.2m was recorded, primarily due to profits generated under Chinese GAAP, which are taxed at a rate of 25%.
Certain costs incurred outside China, including the share incentive scheme, were not tax-deductible.
"In what's becoming a well worn cliché, this is yet another outstanding operational and financial performance by the company and its Caijiaying Mine," said chairman Mladen Ninkov.
"With operating profit up 116%, profit before tax up 114%, and profit after tax up 117% on the same six-month period from last year, all with a balance sheet without any debt, I couldn't be prouder of the company's management, employees, contractors and other stakeholders."
At 1135 BST, shares in Griffin Mining were up 1.44% at 152.16p.
Reporting by Josh White for Sharecast.com.
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