A year ago, Griffin's Zinc Gold mine at Caijiaying in China was suspended throughout the first half because of the low prices on the world's zinc market. Griffin used that time to carry out maintenance at the mine and improve operational procedures, the benefits of which are reflected in better output, ore grades and lower unit costs. And capacity was increased at the processing plant, with a target of a minimum of 750,000 tonnes of ore a year - a programme that is now virtually complete.
As a result, over 260,000 tonnes of ore were processed in the first half, up from 81,000 tonnes, producing 15,000 tonnes of zinc, 4,570 ounces (oz) of gold, 105,000 oz of silver and 441 tonnes of lead. And profits would have been even higher but for a $3.1m (£2m) currency loss on sterling bank deposits.
Unfortunately, the mine was not out of the woods as production had to be suspended again last month following two deaths there. But, assuming mining will be allowed to restart in the near future, Griffin expects further significant improvements in production, helped by access to lower levels at the mine and falling production costs as output rises. And with its large cash pile, equivalent to 24p a share, Griffin is looking to buy other mining assets.
GRIFFIN MINING (GFM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 44p | MARKET VALUE: | £79.9m | |
| TOUCH: | 43-44p | 12-MONTH HIGH: | 51.5p | LOW: 33.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 18 | |
| NET ASSET VALUE: | 76¢ | NET CASH: | $67.1m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 2.4 | -1.35 | -0.75 | nil |
| 2010 | 27.0 | 8.66 | 1.12 | nil |
| % change | +1,039 | - | - | - |
£1=$1.54 Aim: mining | ||||
