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Chairman’s Statement
Review of Operations
Directors and Senior Executive
Directors’ Report
Report of the Independent Auditors
Consolidated Profit and Loss Account
Consolidated Balance Sheet
Statement of Total Recognised Gains and Losses
Consolidated Cash Flow Statement
Accounting Policies
Notes to the Financial Statements
Corporate Information
CONTENTS
CONTENTS
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Registered number: EC13667 Bermuda.
Registered Office: Clarendon House, 2 Church Street, Hamilton HM11, Bermuda
Principal Office: 1 Berkeley Street, London, W1J 8DJ. UK
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I M I T E D
Griffin Mining Limited is a mining development and investment company whose principal asset is the world
class, Caijiaying zinc-gold project, located 200 kilometres north-west of Beijing, China. Griffin, through its
local subsidiary company, has been in China longer than any foreign mining company and was the first foreign
controlled venture to be awarded an exploration licence and the first to be granted a mining licence over a
base metals deposit in China. Griffin is rapidly progressing the Caijiaying zinc-gold deposit to full production.
Further information on the Company is available on the Company’s web site: www.griffinmining.com.
Griffin Mining Limited’s shares are quoted on the Alternative Investment Market (AIM) of the London Stock
Exchange (symbol GFM).
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The 2002 calendar year was yet another momentous
year in the continued development of Griffin Mining
Limited ("Griffin" or the "Company") from a junior
mining company towards being a producing mining
company.
As outlined in last years Chairman’s Statement, the
most critical matter which needed to be addressed in
2002 was providing a Resource Statement, according to
the world’s best practices, to prove to the world
investment community that zone III at Caijiaying was a
world class resource on which a mine could be planned
and built. On the 25th November 2002, Griffin
announced a new resource of 1,230,000 tonnes of zinc
metal and 500,000 ounces of gold, over 61/2 times the
previously estimated contained metal at Caijiaying.
With that information in hand, a feasibility study was
commissioned on underground mining zone III and
processing the zinc via a floatation circuit and the gold
via a simple gravity circuit. That study was to be
completed by the end of the first quarter in 2003. In
March 2003 it was identified that gold production could
be maximized if gold was recovered not only from the
free gold, but also from the gold associated with the
pyrite, arsenopyrite and gold bearing sulphides. This has
meant planning production of a precious metals
concentrate for cyanidation and production of gold doré
bars on site, entailing additional planning, approval and
engineering design work.
Consequently, the timetable for production at Caijiaying
has been rescheduled, fortunately for valid and positive
reasons. The Company can now look forward to a more
extensive processing facility being designed and built,
which will not only be able to process the currently
known mineralization at Caijiaying, but also any new
resources found in the Company’s tenement area.
Whilst mentioning the possibility of new resources being
discovered, it should be noted that only a very small area
at Caijiaying has been drilled, and that to a wide drill grid
spacing. The geology of the area, the proven zinc-gold
resources already at zone III and the success of the
minimal work completed on other areas, clearly indicate
the real possibility of substantial new zinc, gold and other
mineral discoveries. The Company has continued to
identify additional extraordinary exploration targets. In
addition to the defined resource to be mined at zone III,
there are 4 other identified zones of mineralization and 2
new, untested, epithermal gold targets within the larger
regional Caijiaying area. When funding allows, the
CHAIRMAN’S STATEMENT
CHAIRMAN’S STATEMENT
Company intends to confirm the continuation of the
mineralization between zones II and III, test for
extensions of gold mineralization in zone III, seek to
extend the known gold and base metals mineralization in
zone V and undertake drilling of the large epithermal gold
targets along the F45 fault south of zone II.
Given the significant developments at Caijiaying in the
past year it is perhaps not surprising that 2002 saw a
significant rise in the price of the Company’s shares.
The share price at one stage rose more than 500%.
Whilst appreciating the investment returns this has
importantly
provided to shareholders,
demonstrates that the continued fulfilment of our goals
of production at Caijiaying and further exploration
success will continue to bring real value to shareholders
which will be reflected in the Company’s share price.
it more
Lest any of us need reminding, a vision of this scale, in
a developing market such as China, requires a team of
dedicated individuals to implement. Griffin has
continued to have a wide base of supporters too
numerous to mention. It would, however, be remiss
not to mention a special few: the principal geological
and mining consultants, Rupert Crowe and Warren
Woodhouse of CSA Australia Pty Ltd; Agent de
bourse, Charles Dampney at Charles Stanley & Co
Ltd; principal shareholder, Trellus Management Co
LLC; Chief Representative in China, Jeff Sun; and "all
things London" director, Roger Goodwin.
The challenge now before the Company is to finance,
construct, commission and produce a mine at
Caijiaying. Although this sounds like a daunting task,
in fact, the most difficult part of the exercise has been
completed. The resource, or more succinctly, the
approximately US$1.5 billion of metal sitting in zone
III, has been defined. On that proven asset base,
subject to any unforeseen difficulties, we expect to
finance and build the Caijiaying mine in 2003/2004.
The Company welcomes the task.
Griffin thanks you for your continued support and looks
forward to fulfilling the vision which is Caijiaying.
Mladen Ninkov
Chairman 30th April 2003
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Caijiaying project location map
Introduction
Caijiaying Legal and Title
Griffin Mining Limited ("Griffin" or "the Company") is
a mining development and investment company listed
on the Alternative Investment Market of the London
Stock Exchange. Its principal asset is a controlling
interest in a joint venture which holds the mining and
exploration licences over 67 square kilometres in the
Caijiaying area of the Hebei Province ("Caijiaying") in
the Peoples Republic of China ("the PRC").
Caijiaying Geography
Caijiaying is located approximately 200 km north
west of Beijing in Hebei Province in the PRC. The
site is easily accessible by sealed road, has adequate
water supplies available from underground sources
and is connected to the electricity grid. The
Caijiaying area is on the south-east edge of the
Mongolian Plateau. Conditions are not severe
although winters are cold and dry.
Griffin’s interest in Caijiaying has been through its
local Chinese subsidiary company Hebei Hua' Ao
Mining Development Company Limited ("Hebei Hua-
Ao"). Hebei Hua-Ao is a contractual joint venture
entity established in 1994 in which Griffin, through its
wholly owned Australian subsidiary company China
Zinc Pty Ltd ("China Zinc"), has an interest of 60%
(80% until payback of capital). The other shareholders
of Hebei Hua-Ao are the Zhangjiakou City People’s
Government and the Hebei Bureau of the Ministry of
Land and Natural Resources.
Hebei Hua-Ao was the first foreign controlled joint
venture to be awarded a new exploration licence for a
hard rock deposit in the PRC when in October 1998
it received an exploration licence covering an area of
11.3 square kilometres at Caijiaying.
On 21st March 2002, Hebei Hua-Ao became the first
foreign controlled joint venture to be granted a mining
licence over a base metals deposit in the PRC when it
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Satellite image of Caijiaying area
was granted a mining licence over 1.56 square
kilometres of the original 11.3 square kilometres of the
zone III licence area at Caijiaying.
The Zhangjiakou City People’s Government and the
Hebei Bureau of the Ministry of Land and Natural
Resources.
The Company has long recognized the exploration
potential of the area surrounding the original 11.3
square kilometres licence area at Caijiaying. In
2000, Hebei Hua-Ao applied for, and on the 5th of
June 2000 was granted, a 3 year exploration licence
covering an area of over 102.2 square kilometres of
highly prospective ground surrounding the existing
licence area at Caijiaying, this being the largest
block allowed at that time under the new Chinese
Mining Law of 1997. This licence area has since
been reduced to discard the non-prospective areas
and a new 2 year exploration licence was granted in
January 2003 covering 55.7 square kilometres.
A second joint venture is now being formed to hold
the above exploration licence over the 55.7 square
kilometres and any further areas of interest in the
Hebei Province. The Hebei Sino Anglo Mining
Development Company Limited ("Hebei Anglo") is
being formed as a contractual joint venture entity.
In this case, Griffin, through its wholly owned UK
subsidiary company Panda Resources Limited, will
have a 90% interest in Hebei Anglo. The other
shareholders remain the same as in Hebei Hua-Ao:
From left to right: Mr Jin Shengchang, Chief Financial
Officer, Hebei Hua-Ao; Mr Pei Xiaodong, Director of Third
Jeff Haitian Sun, Chief
Geological Brigade; Mr
Representative China, Griffin; Mr Zhao Quanle, Deputy
Director of the MLNR and Director of Hebei Hua-Ao; Mr
Mladen Ninkov, Chairman Griffin; Mr Zhang Baoyi, Mayor
of Zhangjiakou City and Deputy Chairman of Hebei Hua-
Ao; Mr Roger Goodwin, Finance Director Griffin; Mr Rupert
Crowe, Director CSA; Mr Qi Chengxiao, Deputy General
Manager Hebei Hua-Ao; Mr Ji Liansheng, Secretary to the
Mayor of Zhangjiakou City.
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Caijiaying Geology
Regional geological sketch map of Caijiaying Project Area showing original and
new exploration licences, zones of mineralisation and epithermal gold targets.
The Caijiaying zinc mineralization is believed to have
been emplaced 131-204 million years ago during a
volcanic episode that affected ancient, 2.3 billion-year-
old metamorphic rocks, along a major northeast-
trending structure. The base metal mineralization is
believed to have been caused by replacement of certain
horizons in the metamorphic rocks by hot metal-
bearing solutions from the volcanic system. Some gold
may have been deposited at this time, but the main
gold event is interpreted by recent studies to have
occurred later as a hot-spring or epithermal type of
mineralization towards the end of the volcanic period.
This type of epithermal mineralization usually consists
of gold and silver (with minor base-metals) deposited
in veins and breccias with extensive alteration of the
surrounding rock by the hot fluid. The epithermal
nature of the system has been confirmed with
mineralization displaying many features in common
with other world-class epithermal deposits.
The main mineralization occurs within synclinal
folds, formed as part of a conjugate set of structures
in response to movement along the regionally
important F45 Fault, which trends east-northeast
across the area south of the main deposits. The line
of this fault is believed to be on a zone of crustal
weakness so that it may have acted as a conduit for
rising mineralizing fluids.
Caijiaying Discovery
Mineralization was first identified in the Caijiaying
area during the Chinese "Cultural Revolution" in the
late 1960’s. Subsequently exploration teams of the
Third Brigade of the Hebei Province of the now
defunct Ministry of Geology and Mineral Resources
(predecessor to the Ministry of Land and Natural
in Hebei Hua-Ao),
Resources, a shareholder
conducted 10 years of exploration work on Caijiaying,
including 95,000 metres of diamond drilling.
Within the original 11.3 sq km licence area at
Caijiaying, the Third Brigade defined 5 separate
mineralized zones. Zone III, covering an area of some
1.5 square kilometres, was the main focus of exploration
and development activity. The other zones were not
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so intensively explored, but drilling and other work, in
particular in zones II and V, indicated significant
potential for further economic mineralization.
resource being downgraded from that previously
estimated and it was considered more amenable to
smaller scale underground mining.
Mineralization was interpreted by Chinese geologists
of the Third Brigade as forming a series of E-W
trending, fairly steeply (-50 0 to -70 0) southerly-
dipping lenses from 0-500 metres below surface.
However, the geometry of the lenses was recognised
as being complex and that there were probably a
number of different orientations present.
A resource estimate for the deposit was originally
prepared for China Zinc by Bateman Kinhill, who
defined an in situ mineable resource of 27.6 million
tonnes at 7.4% zinc at a 4% zinc cut-off (with a
global resources of 57.8 million tonnes at 4.8% zinc
at a 1% zinc cut-off). The Bateman Kinhill resource
estimate was based on the original Chinese
geological model that showed zinc mineralization
occurring in steep south dipping structures.
Development of Caijiaying
Since 1994, China Zinc, through Hebei Hua-Ao, has
expended some $3.7 million on Caijiaying, again
mostly on zone III, including the cost of a pre-
feasibility study, a mining scoping study, resource
statements, approximately 10,000 metres of diamond
drilling, 300 metres of underground drive, ore-body
modelling, metallurgical test work and various
geological, metallurgical, engineering, environmental,
power and transport studies.
Work initially undertaken by China Zinc involved
infill drilling and resource studies on an open-pit
concept. A polygonal resource estimate in micromine
was prepared for Griffin by independent geological
consultants, CSA Australia Pty Limited ("CSA"), of
51 million tonnes at 5.01% zinc at a 1% zinc cut off
and 22 million tonnes at 8.87% zinc at a 4% zinc cut
off. However, the open pit concept was hampered by
difficulties in interpretation of the ore-block geometry
Underground trial mining in the southern section of
zone III completed in 2000 revealed that instead of
dipping south, the main mineralised bodies trend
north parallel to the drill grid. This resulted in the
In 2000, the Company commissioned a mining
scoping study from CSA in conjunction with
Gillespie Mining Services Limited. This indicated
that an underground mine could be brought into
production at Caijiaying to economically produce
some 180,000 tonnes of ore per annum at 12.3%
zinc, 0.7 grams per tonne gold and 48 grams per
tonne silver over approximately 10 years.
2002 Activity
Diamond drilling at Caijiaying 2002
In 2002 Griffin undertook a programme of orientated
diamond drilling for a total of 2,031 metres to
confirm the interpretation of sub vertical, north
trending lodes and to test for additional lodes. This
work showed that mineralised lodes occur within a
60 metre wide envelope which has been
demonstrated to have a consistent dip of 75-80 0 to
the west and have almost a 0.5 kilometre length and
75 metre vertical extent, the first time such
continuity has been demonstrated in the area. At
least two parallel lodes are present within the
envelope and in places more lodes are present,
contrasting with the previous interpretation of a
single lode. It is likely that this system continues to
the south eastern edge of the deposit, giving an
overall length of 1 kilometre.
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The results of the 2002 drilling programme together
with the drill hole data from past work enabled a new
resource statement to be compiled by independent
consultants Micromine Pty Ltd Consulting Division
("Micromine") in accordance with the guidelines set
out in the Australasian Code for Reporting of Mineral
Resources and Ore Reserves (“JORC Code”).
The new resource estimate exceeded all the
expectations of the Company with 61/2 times the
previously estimated contained metal now identified
in the Caijiaying deposit rising from 190,000 tonnes
to 1,230,000 tonnes of contained zinc metal at a 7%
zinc cut off.
Ignoring the associated base and precious metals, zone
III at Caijiaying hosts:
at a 4% zinc cut-off grade:
• An indicated resource of 16.91 million tonnes
at 7.84% zinc; and
• An inferred resource of 6.67 million tonnes at
8.69% zinc;
• For a total resource of 23.58 million tonnes at
8.08% zinc.
or at a 7% zinc cut-off grade:
Reviewing drill core at Caijiaying
The diamond drilling programme undertaken by
Griffin in the summer of 2002 also encountered
significant gold intercepts which, taken together with
earlier gold results, suggest that a distinct part of the
overall deposit may have potential as a separate gold
resource. In order to gain an impression of the size of
this potential gold resource, Micromine compiled
separate estimates for the gold resource at zone III of:
• 2.61 million tonnes at 6.78 grams per tonne at
a 3 grams per tonne cut off.
• 1.675 million tonnes at 8.63 grams per tonne at
• An indicated resource of 6.95 million tonnes at
a 4 grams per tonne cut off.
11.58% zinc; and
• An inferred resource of 3.60 million tonnes at
a 5 grams per tonne cut off.
11.73% zinc;
• 1.265 million tonnes at 9.99 grams per tonne at
This places over 500,000 ounces of gold at Caijiaying
at a 3 grams per tonne gold cut off. As these
estimates are based only on partial gold analyses and
because the drill-hole spacing is very wide for
estimating gold mineralization, the gold resource is
categorised as inferred.
• For a total resource of 10.55 million tonnes at
11.63% zinc.
These resource estimates cover only zone III at
Caijiaying. The interpretation of steep north-trending
lode orientations is consistent with the mineralization
at zone II, which is situated (within Griffin’s licence
area) 1 kilometre to the south of the main zone III
deposit. This strongly suggests that the two deposits
are continuous, opening up a large area for further
exploration once production begins at Caijiaying.
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Caijiaying Feasibility Study
Conceptual layout of mine and processing facilities at Caijiaying
In November 2002, Griffin commissioned CSA to
complete a full feasibility study for an underground
mining operation at zone III at Caijiaying. This
feasibility study is currently being completed and is
expected to recommend annual production of
200,000 tonnes of ore for processing to produce
some 40,000 tonnes of concentrate per annum
grading 54% zinc with a 90% recovery rate. This
should produce some 22,000 tonnes of zinc metal
and 4,000 ozs of gold per annum.
Mining via underground mining methods has been
selected because of the low cost and long life of the
operation in conjunction with an acceptable rate of
return, as outlined by the scoping study completed
in 2000.
The process plant is planned to consist of two
circuits, a precious metal recovery circuit and zinc
concentrate production circuit. It has been
designed on a modular basis to allow for production
to be increased from the planned initial production
of 200,000 tonnes per annum to 500,000 tonnes of
ore per annum.
Operating costs are expected to be amongst the
lowest of any underground zinc mining operation in
the world.
Tests have shown that the majority of the contained
gold is free although a large portion occurs within
the sulphides.
Caijiaying will benefit from reduced tax rates as the
project is located in a special development region
with no taxes payable on profits in the first two
years of production, rising thereafter in increments
to a maximum 18% income tax after 10 years.
With expected production of 22,000 tonnes of zinc
metal per annum, Caijiaying is expected to be the
11th largest zinc mine in China and Hebei Hua-Ao
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is expected to be the 4th largest zinc producer in
China which, despite declining production and
increased consumption, remains the largest zinc
producing country in the world.
Caijiaying Exploration Potential
The Company has long recognized the exploration
potential of the Caijiaying area, particularly for
gold. Although the Caijiaying Project is being
developed primarily for its zinc resources, there are
more gold targets in the area than there are known
areas of zinc mineralization, albeit at a less advanced
stage of definition.
An epithermal specialist, Dr Noel White, visited
the Caijiaying area in 2002 and confirmed the
epithermal nature of the system, with mineralisation
displaying many features in common with world
class epithermal deposits elsewhere.
Exploration work already undertaken by Griffin has
defined numerous targets at various stages of definition
giving confidence in the objective of long-term gold
production in parallel to zinc production.
The first target can be readily tested within the
planned zinc mine at zone III and, if successful, the
same infrastructure could be used for development,
resulting in very low-cost gold production.
Best intersections to date in zone III have included:
Hole
From
To Interval
metres metres metres
Gold Silver
g/t
G/t
307-26 154.59
163.04
313-13 159.00
161.00
313-14 115.00
117.00
313-14 118.00
126.00
315-03 159.87
163.80
315-17 262.94
268.29
315-27 323.63
327.33
319-12 229.98
235.42
319-16 289.19
293.09
8.45
2.00
2.00
8.00
3.93
5.35
3.70
5.44
3.90
7.83 25.94
11.79 15.00
30.90 39.00
11.65 31.13
13.66 32.34
5.08 18.85
8.04 36.24
6.37 23.97
6.73 26.41
The most obvious near-mine target is the 1.2 km long
area between zones II and III. Now that the
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orientation of the zone III mineralisation is understood
to trend north-south, it is reasonable to expect that it
will continue across the intervening ground and link
up with zone II, which was already known to have this
orientation. It is also reasonable to expect that it will
contain significant gold potential in common with
zone III. This area was poorly tested by previous
Chinese drilling. The zone II – III target needs initial
surface testing to prove the target and it can then be
infill drilled by a combination of surface and
underground exploration to reduce costs.
No exploration or other geological work has been
undertaken by the Company at zone V. Up until 2002,
the area was worked as an underground mine by a
number of Chinese artisanal miners producing both a
base metals and precious metals concentrate. Since
the granting of the mining licence to Hebei Hua-Ao,
the unauthorised mining operation has been closed.
the
taken by Hebei Hua-Ao
Samples
concentrates produced by the artisanal miners and
from previous drilling by the Third Geological Brigade,
show that some of the highest known gold values at
Caijiaying occur in zone V.
from
The greater regional potential of the Caijiaying area is
also considered very good, particularly for gold and
silver. As mentioned above, the F45 Fault target has
now been recognized as a major epithermal structure.
Griffin has mapped two main zones of epithermal
veining each covering 5 kms in length by 1km in
width associated with the fault and separated by a large
valley just west of the known Caijiaying deposits.
In 2002 Griffin conducted a shallow-soil, bulk-leach,
extractable gold (BLEG) survey over the entire area.
Together with the results from an earlier orientation
survey, this work successfully defined two large
anomalous gold areas relative to the mapped veins. The
western target area contains some values over 8 times
background (3.98 parts per billion gold against a local
background of less than 0.5) whereas the eastern one,
which includes the zone II area contains values up to 20
times background (14.63 parts per billion gold).
In the opinion of Dr Noel White, the epithermal
target zones should occur within a depth of between
100-250m and a survey of reverse-circulation drilling
has been recommended for thorough testing of the
large target areas.
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become a profitable mining company, but also gives
it the potential to further expand its influence in the
mining sector of the world’s largest mineral producer.
Griffin will continue to initiate and investigate
transactions both within its traditional mining base
and other areas where its staff and consultants have
particular expertise, to try to add real value to the
Company.
Financial
The Group recorded a loss for the year of $230,000
(2001 loss $543,000).
During 2002, the Company’s investment in Ozmosa
Limited was sold realising a profit of $8,000. (There
were no disposals of investments during 2001).
Operating costs in 2002 were $462,000 (2001
$422,000).
Shareholder funds declined from $7,535,000 at
31 December 2001 to $7,321,000 at 31 December
2002.
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The Future
With the completion of the feasibility study, Griffin
expects to enter into discussions with potential
financiers in the summer of 2003 to raise the necessary
project finance to construct and commission the
underground zinc-gold mine at Caijiaying. The initial
phase of construction will involve the driving of a
decline at Caijiaying, followed by the construction of
processing facilities, with the aim of being in
production in 2004/2005.
Griffin is also seeking to undertake further exploration
work at Caijiaying and, in particular, to undertake an
extensive drilling programme to:
• Test for extensions of the best gold intersection to
date in zone III by underground drilling from
existing workings in the planned mine area.
• Seek to extend the known gold and base metals
surface or
mineralization
underground drilling from existing workings.
zone V via
in
• Undertake an extensive programme of reverse-
circulation drilling of the recently confirmed large
epithermal gold exploration targets along the F45
fault south of zone II.
Confirmation of the continuation of the zinc and gold
mineralization between zones II and III via surface
drilling although highly prospective, will be more
efficiently undertaken after mining in zone III has
begun.
Exploration success in any of these areas should add
significantly not only to the current gold and zinc
resource at Caijiaying, but should also enhance the
they will be economically
probability
extractable due to the proposed processing facilities
to be constructed at Caijiaying.
that
The Company believes that with the commissioning
of the first, majority foreign owned, base metals mine
in the PRC at Caijiaying, then the possibility exists
for world class projects to be offered to Griffin by
various arms of the PRC’s local, provincial and
central
development,
modernisation and operation. The commissioning of
Caijiaying lays the foundation not only for Griffin to
governments
for
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DIRECTORS AND SENIOR EXECUTIVE
DIRECTORS AND SENIOR EXECUTIVE
Directors:
Mladen Ninkov,
Chairman
Mladen Ninkov, Chairman, Australia, aged 41, holds
a Masters of Law Degree from Trinity Hall,
Cambridge and Bachelor of Laws (with Honours)
and Bachelor of Jurisprudence Degree from the
University of Western Australia. He is a principal of
Keynes Capital. He has a mining, legal, fund
management and investment banking background
and is admitted as a barrister and solicitor of the
Supreme Court of Western Australia. He was a
Director and Head of International Corporate
Finance at ANZ Grindlays Bank Plc in London,
Managing Director of Maxwell Central and East
European Partners plc in London and a Vice
President of Prudential-Bache Securities Inc. in New
York. He also worked at Skadden Arps Slate
Meagher & Flom in New York and Freehill
Hollingdale & Page in Australia. He was Chairman
of Westgold Resources NL and a director of
Ramsgate Resources NL, both companies listed on
the Australian Stock Exchange, and was also a
director of Mt Monger Gold Project Pty Ltd, Castle
Hill Resources NL and Matu Mining Pty Ltd.
Roger Goodwin,
President and Finance Director
Roger Goodwin, President and Finance Director, UK,
aged 48, is a Chartered Accountant. He has been
with the Company since 1996 having previously held
senior positions in a number of public and private
companies within the natural resources sector. He is
currently a non executive Director of AIM listed
Texas Oil & Gas Plc. He has a strong professional
background with considerable public company and
corporate finance experience, and experience of
emerging markets particularly in Africa, the CIS and
Eastern Europe.
Dal Brynelsen,
Director
Dal Brynelsen, Director, Canada, aged 56, is a graduate
of the University of British Columbia in Urban Land
Economics. He has been involved in the resource
industry for over 20 years. He has been responsible for
the discovery, development and operation of several
underground gold mines during his career. He is the
President and a director of Paccom Ventures Limited
and provides independent consulting services to
private clients and institutions.
William Mulligan,
Director
William Mulligan, Director, USA, aged 59, has a BSc
from Thomas Clarkson University, an MS in Geological
Engineering from the University of Connecticut and an
MBA from NYU Bernard Baruch School of Business
Administration. He is currently the Managing Director
for Global Projects and Political Risk at AIG Global
Trade and Political Risk Insurance Company, a wholly
owned subsidiary of American International Group Inc.,
and a director of AIG Investment Bank (ZAO) Ltd
based in Moscow. From 1994 to 1996 he was Executive
Vice President for Corporate Development at Latin
American Gold Limited. He is a director of Arcon
International Plc, the Dublin based company which
operates the Galmoy zinc mine in Ireland.
Senior Executive:
Jeff Haitian Sun,
Chief Representative China.
Jeff Haitian Sun is a Chinese citizen and a Professor
of Geology based in Beijing. He holds a PhD and
MSc in mineral deposits from the Chinese University
of Geosciences and has undertaken postdoctoral
research in geology at the Norwegian University of
Technology. He has worked on a number of mineral
projects both in China and overseas. Prior to joining
Griffin he was engaged by Mundoro Mining Inc of
Canada as a senior geologist.
13
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Directors submit their report together with the audited consolidated accounts of Griffin Mining Limited
("the Company") and its subsidiaries ("the Group") for the year ended 31 December 2002.
Financial results
The Group loss on ordinary activities before taxation, amounted to US$230,000 (2001 - loss US$543,000). No taxation
was charged (2001 - nil). The Group loss for the year after taxation of US$230,000 (2001 – loss US$543,000) has been
charged to reserves.
The Group loss per share amounted to 0.2 cents (2001 - loss 0.6 cents). The attributable net asset value per share at
31 December 2002 amounted to 7 cents (2001 - 7 cents). The Directors do not recommend the payment of a dividend.
Principal activities
The principal activity of the Group is that of mining. A review of the Group’s operations for the year ended 31 December
2002 and the indication of likely future developments are set out on pages 4 to 12.
Directors
The Directors of the Company during the year were:
Mladen Ninkov – Australian – Chairman
Dal Brynelsen – Canadian
Roger Goodwin – British - President and Finance Director
William Mulligan – American (US)
John Steele – Canadian – Resigned 7th March 2003
Under the bye laws of the Company, the Directors serve until re-elected at the next Annual General Meeting of the
Company. Being eligible all the Directors currently in office offer themselves for re-election at the forthcoming Annual
General Meeting of the Company.
The interests of the Directors holding office at 31 December 2002 and their immediate families in the share capital of
the Company were as follows:
Name
At 31 December 2002
At 1 January 2002
Mladen Ninkov
Roger Goodwin
Dal Brynelsen
William Mulligan
John Steele
Ordinary shares
no.
33,001
30,000
200,001
1
27,501
Options over Ordinary shares
no.
33,001
30,000
1
1
27,501
ordinary shares no.
6,000,000
800,000
0
300,000
300,000
Options over
ordinary shares no.
6,000,000
800,000
300,000
300,000
300,000
The options granted to the Directors entitle the holders to subscribe for new ordinary shares in Griffin at 5 pence per
share on or before 31 March 2004.
On 11th December 2002 Dal Brynelsen exercised options over 300,000 new ordinary shares in Griffin at an exercise
price of 5 pence per share.
All of the Directors’ interests detailed are beneficial.
14
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
DIRECTORS REPORT
DIRECTORS REPORT
Substantial interests
The following persons were on the register of members of the Company as being the registered holders of 3% or more
of the issued ordinary shares at 31 December 2002 and at 23rd April 2003.
Capita IRG Trustees Limited
Morstan Nominees Limited
Vidacos Nominees
UBS (Luxembourg) SA CEDEL Account
At 31 December 2002
Number
%
31,178,536
16,866,423
7,075,000
3,679,345
30.1
16.3
6.8
3.6
At 23rd April 2003
Number
58,045,809
–
7,075,000
–
%
56.1
–
6.8
–
As Griffin is incorporated in Bermuda, shares in the Company cannot be held or transferred through the CREST
electronic settlement system. However, arrangements have been made for Capita IRG Trustees Limited to issue
depository interests in respect of the underlying ordinary shares in Griffin (the "Depository Interests") which may then
be held and transferred within CREST, pursuant to a depository interest arrangement.
Shareholders may also register their shareholdings with UBS (Luxembourg) SA CEDEL Account, reference 003682323,
for clearance through the international CEDEL clearance system.
Griffin is aware that at 31st December 2002 Trellus Partners L.P. had a beneficial interest in 16,866,423 Ordinary Shares
registered in the name of Morstan Nominees Limited, and a beneficial interest in 2,970,000 Ordinary Shares registered
in the name of UBS (Luxembourg) SA CEDEL Account, which amounts in aggregate to 19.2% of the entire issued
share capital of Griffin at 31 December 2002. At 23rd April 2003 these interests had been registered in CREST
depository interest form through Capita IRG Trustees Limited.
Griffin has been notified that Gartmore Investment Limited, Gartmore Fund Managers Limited and Gartmore Global
Partners, as discretionary investment managers of clients and client funds have an aggregate interest in 9,385,000
Ordinary Shares in the Company representing 9.1% of the ordinary shares in issue of which 7,075,000 shares are
registered in the name of Vidacos Nominees and 2,310,000 shares are registered in the form of CREST depository
interests through Capita IRG Trustees Limited.
Corporate Governance
Although incorporated in Bermuda and therefore not obliged to comply with the code of best practice established by
the Combined Code issued by the Committee on Corporate Governance, the Company has reviewed and broadly
supports this code. The Company does not comply where compliance would not be commercially justified allowing for
the practical limitations relating to the Company’s size.
The Board of directors includes a number of non executive directors who are independent and free from any business
or other relationship which could materially interfere with the exercise of their independent judgement. The Board
meets regularly and is responsible for the overall strategy of the Group, its performance, management and major
financial matters.
15
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Auditors
Grant Thornton have indicated their willingness to continue in office as auditors to the Company and a resolution
proposing their appointment will be put to the forthcoming Annual General Meeting.
Statement of Directors’ responsibilities in respect of the accounts
Bermuda company law and generally accepted best practice requires the Directors to prepare accounts for each financial
year which give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that
period. In preparing these accounts, the Directors have:
• selected suitable accounting policies and applied them consistently;
• made judgements and estimates that are reasonable and prudent;
• stated whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the accounts; and
• prepare the financial statements on a going concern basis unless it is inappropriate to presume the Company will
continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Group. They are also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
This report was approved by the Board and signed on its behalf by:
Roger Goodwin
President and Finance Director
30th April 2003
London
16
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
REPORT OF THE INDEPENDENT AUDITORS
REPORT OF THE INDEPENDENT AUDITORS
Report of the Independent Auditors to the Members of Griffin Mining Limited
We have audited the financial statements of Griffin Mining Limited for the year ended 31 December 2002 which
comprise the consolidated profit and loss account, the consolidated balance sheet, the statement of total recognised
gains and losses, the consolidated cash flow statement, the accounting policies, and notes 1 to 21. These financial
statements have been prepared in accordance with International Accounting Standards and under the accounting
policies set out therein.
This report is made solely to the Company's members, as a body, in accordance with Section 90 of the Bermuda
Companies Act 1981. Our audit work has been undertaken so that we might state to the Company's members those
matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as
a body, for our audit work, for this report, or for the opinions we have formed
Respective responsibilities of Directors and Auditors
The Directors' responsibilities for preparing the Annual Report and the financial statements in accordance with
applicable Bermuda law and International Accounting Standards are set out in the statement of directors' responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
United Kingdom auditing standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared
in accordance with International Accounting Standards. We also report to you if, in our opinion, the directors' report
is not consistent with the financial statements, if the Company has not kept proper accounting records, or if we have
not received all the information and explanations we require for our audit.
We read other information contained in the Annual Report and consider whether it is consistent with the audited
financial statements. This other information comprises the Chairman's statement, review of operations and directors'
report. We consider the implications for our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Basis of opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to the Group's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated
the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the Group at 31 December 2002
and of its loss for the year then ended in accordance with International Accounting Standards.
GRANT THORNTON
REGISTERED AUDITORS
CHARTERED ACCOUNTANTS
SOUTHAMPTON
30th April 2003
17
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
CONSOLIDATED PROFIT AND LOSS ACCOUNT
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2002
(expressed in thousands US dollars)
Income
Gains on the disposal of investments
Net operating expenses
(Loss) on disposal of discontinued operations
Operating (loss)
Foreign exchange gains
Interest receivable and similar income
(Loss) on ordinary activities before taxation
Taxation on loss on ordinary activities
(Loss) for the financial year
(Loss) per share (cents)
Notes
1
2
4
5
6
17
7
2002
$000
8
(462)
–
(454)
159
65
2001
$000
–
(422)
(250)
(672)
47
82
(230)
(543)
–
–
(230)
(543)
(0.2)
(0.6)
18
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET
As at 31 December 2002
(expressed in thousands US dollars)
Notes
Non-current assets
Intangible assets
Tangible assets
Current assets
Portfolio investments
Accounts receivable
Prepaid expenses
Cash and deposits
Current liabilities
Accrued expenses
Creditors
Net current assets
Total net assets
Capital and reserves
Share capital
Share premium
Contributing surplus
Investment revaluation reserve
Foreign exchange reserve
Profit & loss account
Shareholders’ equity interests
8
9
10
11
12
13
14
15
16
17
2002)
$000)
5,617
2
5,619
29
10
13
1,737
1,789
(57)
(30)
1,702
2001)
$000)
4,985
3
4,988
17
12
7
2,581
2,617
(32)
(38)
2,547
7,321
7,535
1,036
15,537
3,690
(844)
152
(12,250)
1,033
15,516
3,690
(857)
173
(12,020)
7,321
7,535
Number of shares in issue
103,557,248
103,257,248
Attributable net asset value per share
19
$0.07
$0.07
The accounts on pages 18 to 29 were approved by the Board of Directors and signed on its behalf by:
Mladen Ninkov.
Chairman
30th April 2003
Roger Goodwin
President and Finance Director
19
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
STATEMENT OF RECOGNISED GAINS AND LOSSES
STATEMENT OF RECOGNISED GAINS AND LOSSES
For the year ended 31 December 2002
(expressed in thousands US dollars)
(Loss) for the financial year
Unrealised gains / (losses) on investments
Currency translation differences on foreign currency
net investments
Total gains and losses recognised in the year
Notes
15
16
18
2002)
$000)
(230)
13
(21)
2001)
$000)
(543)
(485)
13
(238)
(1,015)
Losses and profits for the financial year are the same as those on an historical cost basis.
20
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
CONSOLIDATED CASH FLOW STATEMENT
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2002
(expressed in thousands US dollars)
Notes
2002)
$000)
2001)
$000)
Net cash (outflow) from operating activities
(285)
(420)
Investing activities
Interest received
Payments to acquire intangible fixed assets
Payments to acquire tangible fixed assets
Net cash (outflow) from investing activities
Net cash (outflow) before financing
Financing
Issue of ordinary share capital
Expenses paid in connection with share issue
5
8
9
12/13
13
65
(648)
–
(583)
(868)
24
–
24
(Decrease) / increase in cash and cash equivalents
11
(844)
Reconciliation of operating (loss) to net cash (outflow)
from operating activities
Operating (loss)
Depreciation
(Gains) on sale of investments
Receipts on the sale of investments
Losses on disposal of discontinued operations
(Increase) / decrease in debtors
Increase / (decrease) in creditors
Other non-cash income, including exchange differences
2
4
(454)
1
(8)
8
–
(4)
17
155
(285)
82
(434)
(2)
(354)
(774)
3,101
(116)
2,985
2,211
(672)
3
–
–
250
10
(61)
50
(420)
21
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
ACCOUNTING POLICIES
ACCOUNTING POLICIES
Basis of accounting
The accounts have been prepared in accordance with applicable International Accounting Standards.
The significant accounting policies adopted are detailed below:
Accounting convention
The accounts have been prepared under the historical cost convention modified for the revaluation of portfolio
investments.
Consolidation basis
The Group accounts consolidate the accounts of the Company and all its subsidiary undertakings drawn up to 31
December each year.
The results of subsidiary undertakings acquired are included from the date of acquisition. Profits or losses on intra-group
transactions are eliminated in full. On acquisition of a subsidiary, all of the subsidiary’s assets and liabilities which existed
at the date of acquisition are recorded at their fair values reflecting their condition at that date.
Non-current assets
Intangible assets
Expenditure on licences, concessions and exploration incurred by subsidiary undertakings are carried as intangible assets
until such time as it is determined that there are commercially exploitable reserves at which time such costs will be
transferred to tangible fixed assets to be amortised over the expected productive life of the asset. The Group’s intangible
assets are subject to periodic review by the Directors. Exploration, appraisal and development costs determined as
unsuccessful are written off to the profit and loss account.
Tangible assets
Plant and equipment, office furniture and equipment and motor vehicles are shown at cost less depreciation and
provisions for impairment in value (see note 9).
Depreciation
Plant and equipment will be depreciated at rates appropriate to the expected life of the asset once production has
commenced. Office equipment is depreciated over four years on a straight line basis.
22
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
ACCOUNTING POLICIES
ACCOUNTING POLICIES
Investments
Current asset investments are valued as follows:
Portfolio investments
Marketable securities listed or traded on a recognised stock exchange, are valued at the bid market price on such
exchange or market.
Unquoted investments are initially valued at cost. A reduction in the value of an unquoted investment will be made if
considered appropriate in the light of a company’s condition or prospects. Increases in value will only be made if
substantiated by significant transactions in the relevant company’s shares by third parties or in the event of a material
change in the underlying value of the company.
Realised gains and losses on sales of investments are calculated based on the average cost of the investment and are
reflected in income when realised.
Investment revaluation reserve
Unrealised appreciation and depreciation of portfolio investments as of 31 December are reflected within the investment
revaluation reserve.
Foreign currency transactions
The accounts have been prepared in United States dollars being the local currency of Bermuda. Whilst registered in
Bermuda, the Company, together with its subsidiaries, operate in China, the United Kingdom and Australia.
Investments and monetary items have been translated at rates in effect at the balance sheet date. Foreign currency
transactions have been translated at the rate in effect at the date of transaction. Any realised or unrealised exchange
adjustments have been charged or credited to income.
Assets and liabilities held in overseas subsidiary companies in foreign currencies are translated into United States dollars
at the rate of exchange ruling at the balance sheet date and profit and loss account items are translated at the average
rate for the year. The exchange difference arising on the re-translation of opening net assets is taken directly to the
foreign exchange reserve. All other translation differences are taken to the profit and loss account.
Income
Income comprises gains on disposal of investments and other income receivable from third parties net of Value Added
Tax or similar taxes.
23
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
1. Income
The Group’s income arises from continuing operations.
2. Net operating expenses
Administrative expenses include:
Depreciation
Staff Costs
Number of persons employed by the Group
All operating expenses charged to profit relate to continuing operations.
3. Directors’ remuneration
2002
$000
1
163
No.
5
The following fees and remuneration were receivable by the Directors holding office during the year:
Mladen Ninkov
Dal Brynelsen
Roger Goodwin
William Mulligan
John Steele
Fees
Salary
$000
$000
Taxable
benefits
$000
–
–
–
–
–
–
–
104
–
–
–
–
–
–
–
Total
2002
$000
–
–
104
–
–
2001
$000
3
110
No.
4
Total
2001
$000
–
–
86
–
–
Keynes Capital, the registered business name of Keynes Investments Pty Limited as trustee for the Keynes Trust, received
fees under a consultancy agreement of $225,000 (2001 $200,000) for the provision of advisory and related services to
Griffin Mining Limited and its subsidiaries during the year. Mladen Ninkov is a director and employee of Keynes
Investments Pty Limited.
4. (Loss) on the disposal of discontinued operations
STREMCO SA Burkina Faso gold exploration and development
2002
$000
–
2001)
$000)
(250)
24
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
5. Interest receivable and similar income
Bank and short term interest
6. Taxation on loss on ordinary activities
Taxation on loss on ordinary activities
Corporation tax
2002)
$000)
65
2002)
$000)
–
2001
$000
82
2001
$000
–
The Company is resident for corporation tax purposes in the United Kingdom. No charge to corporation tax arises in
the United Kingdom due to losses in the year. The Company has unutilised income tax losses estimated at $6.1m, and
capital losses estimated at $2.2m.
7. (Loss) per share
The loss per share has been calculated on the basis of the net loss after taxation of US$230,000 (loss US$543,000 in
2001) and the weighted average number of shares in issue in the year ended 31 December 2002 of 103,266,289
(85,098,010 in 2001).
There is no dilutive effect of share purchase options.
8. Intangible assets
Exploration interests
China – Zinc
COST / VALUATION
At 1 January 2002
Foreign exchange adjustments
Additions during the year
At 31 December 2002
NET BOOK VALUE
At 31 December 2002
At 31 December 2001
$000
4,985
(16)
648
5,617
5,617
4,985
Intangible assets represent fair values on acquisition, plus subsequent expenditure on licences, concessions, exploration,
appraisal and development work. Where expenditure on an area is determined as unsuccessful, such expenditure is written
off to the profit and loss account. The recoverability of these assets depends, initially, on successful appraisal activities, details
of which are given in the report on operations. The outcome of such appraisal activity is uncertain. Should economically
exploitable mineral deposits be established, sufficient finance would be required to bring such discoveries into production.
25
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
9. Tangible assets
Office furniture and equipment
COST / VALUATION
At 1 January and 31 December 2002
DEPRECIATION
At 1 January 2002
Provided during the year
At 31 December 2002
NET BOOK VALUE
At 31 December 2002
At 31 December 2001
10. Portfolio investments
$000
21
18
1
19
2
3
Quoted (cost $873,000- 2001 $873,000)
2002
$000
29
2001
$000
17
Quoted securities are valued at the bid market price. Unquoted investments have been fully provided against. Quoted
and unquoted investments are available for sale.
11. Cash and deposits
Analysis of changes in cash and cash equivalents
At 1 January
Net cash (outflow) / inflow
At 31 December
2002
$000
2,581
(844)
1,737
2001
$000
370
2,211
2,581
26
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
12. Share capital
AUTHORISED:
Ordinary shares of US$0.01 each
1,000,000,000
10,000
1,000,000,000
10,000
2002
2001
Number
$000)
Number
$000
CALLED UP ALLOTTED AND FULLY PAID:
Ordinary shares of US$0.01 each
At 1 January
Transfer to Contributing Surplus
Issued during the year
At 31 December
103,257,248
–
300,000
103,557,248
1,033
–
3
1,036
41,003,551
–
62,253,697
103,257,248
4,100
(3,690)
623
1,033
On 20th December 2002, 300,000 new ordinary shares in the Company were allotted at 5 UK pence ($0.08) per
ordinary share on the exercise of options.
On 23rd October 2002, in consideration for providing investor relations services, warrants were granted to C3
Consultants exercisable into; 750,000 new ordinary shares of Griffin at an exercise price of 5 pence per share; 500,000
new ordinary shares of Griffin at an exercise price of 10 pence per share; 500,000 new ordinary shares of Griffin at an
exercise price of 15 pence per share; and 250,000 new ordinary shares of Griffin at an exercise price of 20 pence per
share. The 5p and 10p warrants are exercisable at any time between 30th September 2002 and 30th September 2003
and the 15p and 20p warrants are exercisable at any time between 30th September 2002 and 30th September 2004.
13. Share premium
At 1 January
Premium on shares issued in year
Expenses paid in connection with share issue
At 31 December
14. Contributing surplus
At 1 January
Transfer from share capital
At 31 December
2002
$000
15,516
21
–
15,537
2002
$000
3,690
–
3,690
2001
$000
13,154
2,478
(116)
15,516
2001
$000
–
3,690
3,690
The Contributing surplus is a statutory reserve for the maintenance of capital under Bermuda company law and was
created on the reduction in the par value of the Company’s ordinary shares on 15th March 2001.
27
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
15. Investment revaluation reserve
At 1 January
Movements during the year
At 31 December
2002
$000
(857)
13
(844)
2001
$000
(372)
(485)
(857)
Unrealised appreciation and depreciation of portfolio investments are reflected in the investment revaluation reserve.
16. Foreign exchange reserve
At 1 January
Movements during the year
At 31 December
2002
$000
173
(21)
152
2001
$000
160
13
173
Exchange differences arising on the retranslation of opening net assets of overseas subsidiary undertakings, whose
accounts are prepared in local currencies, are reflected in the foreign exchange reserve.
17. Profit and loss account
At 1 January
(Loss) for the financial year
At 31 December
18. Reconciliation of shareholders’ funds
Total (losses) and gains recognised in the year
Issue of ordinary shares in the year
Net (reductions in)/ additions to shareholders’ funds
Opening shareholders’ funds
Closing shareholders’ funds
19. Attributable net asset value per share
2002
$000
(12,020)
(230)
(12,250)
2001
$000
(11,477)
(543)
(12,020)
2002
$000
(238)
24
(214)
7,535
7,321
2001
$000
(1,015)
2,985
1,970
5,565
7,535
The attributable net asset value per share has been calculated from the consolidated net assets of the Group divided by
the number of ordinary shares in issue at 31 December 2002 of 103,557,248 (103,257,248 at 31 December 2001).
28
R E P O R T
E P O R T A N DN D A C C O U N T S
2 0 0 2
C C O U N T S 2 0 0 2
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
20. Financial instruments
The Group finances its operations primarily from equity issues. The Group does not enter into derivative transactions
such as interest rate swaps, forward rate agreements or forward currency contracts. The Group has no borrowings other
than trade creditors and funds in excess of immediate requirements are placed in US dollar and sterling short term fixed
and floating rate deposits. Although the Group has overseas subsidiaries operating in China and Australia, whose costs
are denominated in local currencies, liabilities are primarily incurred in US dollars.
In the normal course of its operations the Group is exposed to foreign currency and interest rate risks.
The Group places funds in excess of immediate requirements in US dollar and sterling deposits with a number of
banks to spread currency, interest rate and bank risk. These deposits are kept under regular review to maximise interest
receivable and with reference to future expenditure and future currency requirements.
21. Subsidiary companies
At 31 December 2002, Griffin Mining Limited had interests in the share capital of the following principal subsidiary companies.
Name
China Zinc
Pty Limited
Hebei Hua’ Ao Mining
Development Company
Limited*
Class of
shares held
Proportion of
shares held
Nature of
business
Country of
incorporation
Ordinary
100%
Holding company
Australia
Zinc and gold mining
and development
China
80%
(reducing to
60%
after payback of
capital expenditure)**
Panda Resources Limited
Ordinary
100%
Holding company
England and Wales
* China Zinc Pty Limited and Panda Resources Limited are wholly owned directly by the Company. China Zinc Pty
Limited has a controlling interest in Hebei Hua’ Ao Mining Development Company Limited (see below).
** The joint venture contract establishing the Hebei Hua’ Ao Mining Development Company Limited provides that
80% of the net profits generated by the joint venture, together with a coupon of 4.5%, will be paid to the foreign party
until such time as the foreign party’s investment in the project has been recouped. Thereafter the foreign party will
receive 60% of the net profits, in accordance with its share in the equity interest in the joint venture.
29
G R I F F I N
R I F F I N M I N I N G
I N I N G L I M I T E D
I M I T E D
CORPORATE INFORMATION
CORPORATE INFORMATION
Principal office:
Registered office:
China Zinc office:
Directors:
Company Secretary:
Nominated Adviser
and Broker for AIM:
Auditors:
Solicitors:
Bankers:
Geological Consultants:
UK Registrars & Transfer Agents:
30
1 Berkeley Street,
London. W1J 8DJ. UK.
Telephone: + 44 (0)20 7016 8821
Facsimile: + 44 (0)20 7016 9124
Email: griffin@griffinmining.com
Web site: www.griffinmining.com
Clarendon House,
2 Church Street, Hamilton. HM11. Bermuda.
Level 9, BGC Centre,
28 The Esplanade,
Perth, Western Australia 6000. Australia
Telephone: + 61(0)8 9321 7143
Facsimile: + 61 (0)8 9321 7035
Mladen Ninkov (Chairman)
Roger Goodwin (President & Finance Director)
Dal Brynelsen
William Mulligan
Roger Goodwin
Charles Stanley and Company Limited
25 Luke Street, London. EC2A 4AR. UK
Grant Thornton
31 Carlton Crescent, Southampton. SO15 2EW.
Denton Wilde Sapte
One Fleet Place, London. EC4M 7WS. UK.
Conyers Dill & Pearman
Clarendon House, Church Street, P.O. Box HM 666,
Hamilton. HMCX. Bermuda.
National Westminster Bank PLC.
St James’s and Piccadilly, London. W1A 2DG. UK.
The Bank of N T Butterfield & Son Ltd
Rosebank Centre, 14 Bermudiana Road,
Pembroke, Bermuda.
Anglo Irish Bank Corporation plc
10 Old Jewry, London. EC2R 8DN. UK
CSA Australia Pty Limited
Level 1, 47 Burswood Road,
Burswood, Western Australia 6104. Australia.
Capita IRG plc
Bourne House, 34 Beckenham Road, Beckenham,
Kent. BR3 4TU. UK.
Designed and produced by CPL Associates, London.