Zinc, gold, silver and lead. The metals that come out of Griffin Mining's (GFM) Caijiaying project are in demand, and so are the Aim-traded group’s shares. But after a staggering run over the last year, investors might conclude that the group could be about to hit a wall. That’s one possible conclusion from 2017’s record results, which provided no news on a long-sought licence that might allow the Chinese miner to double production.
Of course, based on last year’s numbers, shareholders have much to cheer. Record throughput, improved grades, while higher prices and stable costs meant operating cash flow more than tripled to $77.4m (£54.5m), which in turn allowed Griffin to retire its borrowings. Free of interest payments, and with metal prices again up on the year, there’s little wonder that Griffin’s price-to-book value now sits at a two-year high.
Yet chairman Mladen Ninkov included a sanguine note to his commentary, reiterating his frustration at “the continuing inability to secure the new licence for the greater Zone II area”. It's a shame, as processing facilities are in place, and a second portal to improve ore transportation efficiency is nearly complete. Despite these sunk costs, Griffin has decided to keep hold of its swelling cash deposits, rather than pay a dividend.
On average, analysts expect adjusted pre-tax profit of $52.2m and EPS of 21¢ for this year, compared with forecasts of $53.8m and 22¢ for 2017.
GRIFFIN MINING (GFM) | ||||
ORD PRICE: | 139p | MARKET VALUE: | £237m | |
TOUCH: | 138.5-140p | 12-MONTH HIGH: | 148p | LOW: 49p |
DIVIDEND YIELD: | nil | PE RATIO: | 8 | |
NET ASSET VALUE: | 113¢ | NET CASH: | $26.5m |
Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
2013 | 71.1 | 14.8 | 4.6 | nil |
2014 | 45.6 | 1.0 | 0.1 | nil |
2015 | 59.8 | -0.9 | -1.2 | nil |
2016 | 66.3 | 10.4 | 3.3 | nil |
2017 | 127 | 60.9 | 24.6 | nil |
% change | +91 | +486 | +646 | - |
Ex-div: | na | |||
Payment: | na | |||
£1=$1.42 |