Contents
Chairman’s statement
Overview
Caijiaying
intrOduCtiOn
develOpment
mineral resOurCe estimate
geOlOgy
explOratiOn
OperatiOns
COmmunity investment & partnership
FinanCial
strategiC review
Caijiaying
aCquisitiOns
direCtOrs and seniOr exeCutives
direCtOrs’ repOrt
repOrt OF the independent auditOr
COnsOlidated inCOme statement
COnsOlidated statement OF COmprehensive inCOme
COnsOlidated statement OF FinanCial pOsitiOn
COnsOlidated statement OF Changes in equity
COnsOlidated Cash FlOw statement
aCCOunting pOliCies
nOtes tO the FinanCial statements
COrpOrate inFOrmatiOn
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Griffin Mining Limited is a mining and investment company whose principal asset is the Caijiaying zinc-gold mine.
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).
Registered number: 13667 Bermuda.
Registered Office: Clarendon House, 2 Church Street, Hamilton HM11, Bermuda
United Kingdom Office: 60 St James’s Street, London SW1A 1LE
1
RepoRt and accounts 2015
2
Griffin MininG LiMited Caijiaying Mine Site, Winter 2015/2016
3
RepoRt and accounts 2015 Chairman’s statement
It is with mixed emotions that I present to you, the
were significantly lower in 2015 than in 2014 with zinc
shareholders and owners of Griffin Mining Limited
prices down 11.5%, gold down 17% and silver down
(“Griffin” or the “Company”), the Annual Report and
30%.
Accounts of the Company for the 2015 calendar and
financial year. It was a year of major achievements but
also significant difficulties. Although the Company was
able to generate an operating profit of $4.3 million,
it still eventuated in the first loss after tax in the
Company’s operating history. A difficult, emotional
event for all concerned at Griffin.
The year contained many disappointments, none of
which was more significant than the deaths of two
contractors in separate events in June and October of
2015. The loss of life in any enterprise is debilitating,
to staff, the enterprise and most of all to the families
left behind. The deaths were also a disaster for the
Company as mining operations were suspended for
over 3 months effectively only allowing low grade
stockpiled ore to be processed with the consequential
erosion of profit margins.
The last major disappointment of the year was
the continuing delay in obtaining the new Mining
Licence over Zone II. It is now years overdue and
restricts the Company’s ability to reach a 1.5 million
tonne throughput. Needless to say, a huge amount
of management time is dedicated daily to ensure this
process reaches a successful conclusion in 2016.
For all the negatives of 2015, there have been some
major victories. The first was the successful conclusion
to the mine and processing plant upgrade. The
new 750,000 tonne nameplate capacity ball mill, in
conjunction with the pre-existing ball mills, provides
the Company with a minimum of 1.5 million tonnes
of throughput capacity and more. In addition, the
completion of the new grid connected 35,000 volt
power line and sub-station ensures sufficient power to
now run a full capacity plant, all underground mining
Yet in 9 months of operations, in comparison to 2014,
operations and administration and camp facilities.
the Company was still able to increase throughput
from 572,390 to 839,713 tonnes, revenues from $46
million to $59 million, metal in concentrate of zinc
from 25,901 tonnes to 38,560 tonnes, gold from 7,623
ounces to 10,363 ounces, silver from 201,982 ounces
Secondly, the North and South Declines were joined by
a new, 470 metre link drive which combines the Zones
II and III orebodies for ease of mining and haulage in
the future, A new, second portal to access the Zone II
to 343,575 ounces and lead from 857 tonnes to 1,785
area is expected to be completed in 2016.
tonnes. All this bodes extraordinarily well for when the
Caijiaying Mine is up and running at full capacity.
Thirdly, a new master agreement was signed between
the Third Geological Brigade of Hebei Province with
Unfortunately, and as is so often I have written in the
the Company to examine their extensive database
past, mining is substantially a fixed cost business and
for existing, known deposits and prospective mining
metals prices were again decimated in 2015. Prices
areas and enter in commercial arrangements on
received by the Company for metal in concentrate
those projects. This new partnership is particularly
4
Griffin MininG LiMited attractive in light of the Company’s better knowledge
earnings, he’s not thinking about what day of the week
of the geological controls of the Caijiaying Mine. In
it is, he doesn’t care what investment research from
particular, this agreement may have significant benefit
any place says, he’s not interested in price momentum,
for all areas within trucking distance of the Caijiaying
volume or anything. He’s simply asking: What is the
Mine and its existing processing facilities. It goes
business worth?”. May 2016 realize the true value of
without saying that the Company continues to evaluate
the Company.
numerous projects worldwide on a daily basis in this
depressed mining market to find the hidden gem.
Excitingly, on the drilling and geological work
completed to date, it seems certain that there exists
Mladen Ninkov
the potential for significant additional resources to be
Chairman
added to the known resource at the Caijiaying Mine.
13th April 2016
Although work has been suspended for the moment
on the new JORC resource estimated due to other
priorities for our human and capital resources, it is
expected a new resource estimate will be announced at
some point in 2016.
Lastly, and most importantly, our thanks, on a daily
basis, goes to you, the owners of the Company, for
your continued support, trust and loyalty, particularly
in such a difficult year. In this modern, internet driven,
multi media platformed world which we now find
dominates social and business commentary, uninformed
and disingenuous comment is far too often and freely
posted. Let me assure you that the efforts of your staff
and directors remain Herculean in their scope and
endeavour. We remain firmly and irrevocably focused
on delivering the returns you deserve and expect from
your Company.
In terms of the continuing issue of the share price,
I leave you with the words of a commentator after a
speech by Warren Buffet, “He’s not looking at quarterly
earnings projections, he’s not looking at next year’s
5
RepoRt and accounts 2015 6
Griffin MininG LiMited Griffin Directors Rupert Crowe, Dal Brynelsen Mladen Ninkov, Roger Goodwin and Adam Usdan
by the newly commissioned 750,000 tonne per annum primary ball mill
7
RepoRt and accounts 2015 overview
Griffin Mining Limited (‘Griffin’ or ‘the Company’)
is a mining and investment company, incorporated in
Bermuda, whose shares are quoted on the Alternative
Investment Market of the London Stock Exchange
(“AIM”).
The Company also holds 90% of Hebei Sino Anglo
Mining Development Company Limited (“Hebei
Anglo”), which holds 27.5 square kilometres of
exploration licences immediately surrounding the
Hebei Hua Ao Licence Area.
The major asset of the Company is an 88.8% interest
in Hebei Hua Ao Mining Industry Company Limited
(‘Hebei Hua Ao’), which holds 9.9 square kilometres
of mining and exploration licences including the
mine and processing facilities at Caijiaying in the
People’s Republic of China (the “Caijiaying Mine”).
The Company continues to aggressively explore,
expand and develop the Caijiaying Mine, whilst also
investigating further potential acquisitions of mining
projects that are capable of being brought into
production and to meet historically preset, economic
returns to shareholders.
Caijiaying Mine Location
8
Griffin MininG LiMited Caijiaying
INTRODUCTION
facilities,
The Caijiaying Mine is an operating zinc, gold,
silver and lead mine, together with a processing
plant, camp and supporting
located
approximately 300 kilometres by road, north-west
of Beijing in Hebei Province. The Caijiaying Mine
site is easily accessible by freeway from Beijing. The
site has significant water supplies, a 35kv power line
connected to the electricity grid, full connectivity
to fixed and mobile tele-communications systems
and broadband access for internet services. It is 63
kilometres from Chongli, the host city of the 2022
Winter Olympic Games and to which a high speed
train link from Beijing is currently being completed.
Climatic conditions are not severe with warm
summers and cold, dry winters enabling Caijiaying
to operate for 365 days a year.
DEVELOPMENT
Hebei Hua Ao is a contractual co-operative joint
venture company entity established in 1994. Initially,
Griffin held 60% of Hebei Hua Ao (through a
wholly owned subsidiary) with the remaining
40% held by the Zhangjiakou Guoxin Enterprise
Management and Service Center (“Guoxin”), the
previously named Zhangjiakou Caijiaying Lead Zinc
Mining Company, the shareholders of which remain
the Zhangjiakou City People’s Government and the
Third Geological Brigade of Hebei Province.
The initial term of Hebei Hua Ao was 25 years and
was due to expire in 2019. In light of the continuing
increase in the resources base and production profile
of the Caijiaying Mine, the Company, through
its wholly owned subsidiary China Zinc Limited,
purchased an additional 28.8% interest in Hebei
Hua Ao from Guoxin in 2012. Griffin now holds an
88.8% equity interest in Hebei Hua Ao and Guoxin
retains an 11.2% interest. In addition, and as part of
this purchase agreement, the term of the Hebei Hua
Ao joint venture was extended to October 2037.
In January 2004, a second contractual joint venture
company, Hebei Anglo, was formed to hold the
mineral rights to the area surrounding the original
Hebei Hua Ao licence area and any other areas of
interest in Hebei Province. Griffin, through its
wholly owned UK subsidiary, Panda Resources
Limited, has a 90% interest in Hebei Anglo whilst
Guoxin holds 10%. Griffin, through Hebei Hua
Ao and Hebei Anglo, has a controlling interest in
mining and exploration licences over approximately
37.5 square kilometres at Caijiaying.
extensive
exploration,
Following
resource
delineation drilling, a number of scoping studies,
feasibility study, financing and construction, Griffin
successfully commissioned the Caijiaying Mine on
time and within budget in 2005 with an initial design
production throughput rate of 200,000 tonnes of ore
per annum.
Numerous upgrades
the Caijiaying Mine
to
and processing facilities have taken place since
commissioning. In January 2016 the Company
completed a further upgrade of the processing
facilities at the Caijiaying Mine and the construction
of a new 35kv power line connected to the main
grid enabling a new third primary ball mill to be
commissioned. This latest upgrade has taken mill
throughput capacity to 1.5 million tonnes of ore
capable of being processed per annum.
Underground development continues with a main
drive now being completed between Zone III and
Zone II and the significant expansion of the existing
mining operations at Zone III. The mining and
development of Zone II is subject to the successful
granting of a new mining licence over Zone II.
9
RepoRt and accounts 2015 10
Griffin MininG LiMited Construction of the new 35,000 volt power line
11
RepoRt and accounts 2015 MINERAL RESOURCE ESTIMATE
In June 2013, a Mineral Resource Estimate for
Caijiaying was reported. The continuing success of
the exploration programme in conjunction with infill
drilling and on-going mine development, is anticipated
to lead to an upgrade of the Mineral Resource Estimate
for the Caijiaying Mine. The 2015 Mineral Resource
estimate is reported at a zinc cut-off grade of 1% and,
as amended for mining depletion, is summarised below.
Caijiaying Zone III Remaining Mineral Resources 31 December 2015
Grade Tonnage Reported above a Cut off Grade of 1.0% Zn
Zone III
Category
Measured
Indicated
Inferred
Sub-Total
Zone II
Category
Measured
Indicated
Inferred
Sub-Total
Combined
Category
Measured
Indicated
Inferred
Total
Tonnes Zn
(%)
(Mt)
Pb
(%)
Ag
(g/t)
Au
(g/t)
Zn Metal Pb Metal Ag Metal
(t)
(Oz)
(t)
12.6
7.9
7.7
28.3
4.9
4.4
4.2
4.6
0.3
0.2
0.2
0.2
26.1
22.3
18.5
23.0
0.8
0.7
0.5
0.7
618,000
353,000
323,000
1,294,000
37,000
14,000
12,000
63,000
10,628,000
5,699,000
4,558,000
20,885,000
Caijiaying Zone II Remaining Mineral Resources 31 December 2015
Grade Tonnage Reported above a Cut off Grade of 1.0% Zn
Tonnes Zn
(%)
(Mt)
Pb
(%)
Ag
(g/t)
Au
(g/t)
Zn Metal Pb Metal Ag Metal
(t)
(Oz)
(t)
Au Metal
(Oz)
311,000
171,000
129,000
611,000
Au Metal
(Oz)
-
4.1
15.6
19.6
-
3.0
3.3
3.3
-
0.7
0.8
0.7
-
24.9
24.5
24.6
-
0.3
0.3
0.3
-
-
-
-
123,000
516,000
638,000
27,000
3,242,800
39,300
117,000
144,000
12,276,700
15,519,600
124,200
163,500
Caijiaying Combined Global Remaining Mineral Resources
Grade Tonnage Reported above a Cut off Grade of 1.0% Zn
Tonnes Zn
(%)
(Mt)
Pb
(%)
Ag
(g/t)
Au
(g/t)
12.6
12.0
23.2
47.9
4.9
4.0
3.6
4.0
0.3
0.3
0.6
26.1
23.2
22.5
0.4
23.6
0.8
0.5
0.3
0.5
Zn Metal Pb Metal Ag Metal
(t)
(Oz)
(t)
618,000
476,000
37,000
41,000
10,628,000
8,942,000
839,000
129,000
16,835,000
Au Metal
(Oz)
311,000
210,000
253,000
1,933,000
207,000
36,404,000
774,000
Note: Zone II Mineral Resource includes 1.49 million tonnes at 3.09% zinc oxide material.
The Mineral Resource estimate is based on 2,470 underground diamond drill holes and 579 surface drill holes.
The underground drilling was carried out using nominal fan patterns of 20m by 20m, grading to a 40m by 40m pattern at depth. Resource
wireframes were interpreted by CSA Global in consultation with Griffin’s geologists. The resource outlines were based on mineralisation envelopes
prepared on cross-sections using a nominal 1% Zn cut-off grade. The Mineral Resource has been depleted using a three-dimensional survey “As
Built” wireframe which models all of the mined out voids at they stand at 31st December 2015.
The updated Caijiaying Mineral Resources are based on resource modelling work completed by CSA Global Pty Ltd in 2013 and reported in
accordance with JORC 2004 guidelines. The resource model has not been updated to comply with JORC 2012 guidance on the basis that the
information has not materially changed since it was last reported, other than due to mining depletion.
The information in this report that relates to Mineral Resources is based on information compiled by Steve Rose, who is a Fellow of The
Australasian Institute of Mining and Metallurgy. Steve Rose has sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). Steve Rose consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
12
Griffin MininG LiMited
GEOLOGY
Mineralisation at Caijiaying is believed to be
related to a Jurassic igneous event that affected the
2.3 billion year old metamorphic basement rocks.
Base metal and gold mineralisation associated with
Jurassic intrusives have replaced favourable horizons
in the metamorphic rocks, most notably calcsilicates
and marble. Porphyry sills and dykes intruding along
faults have then cut across the sequence.
Ongoing exploration in the area surrounding the
Caijiaying Mine and within Hebei Hua Ao’s and Hebei
Anglo’s tenement boundary continues to confirm the
area to be highly prospective, indicating significant
potential for further base metal and gold deposits.
EXPLORATION
The exploration program at Caijiaying in 2015
continued to expand existing areas of mineralisation,
and to provide new targets with the aim of ensuring
an ongoing supply of ore. This involved prioritising
targets in the following categories:
• In-mine areas between or adjacent to known
orebodies;
• Near-mine targets, mainly within reach of
underground drilling from existing or planned
drives; and
• Regional targets both within and adjacent to
existing licences.
Hebei Hua Ao Area
Exploration within the Caijiaying Mine continued
to target extensions of known ore bodies and areas
adjacent to known ore bodies. Targets included
Zone III for extensions of known zinc rich lodes,
Zone II for extensions of lead and zinc rich lodes and
the area between Zones II and III for zinc rich and
high gold lodes. In 2015, 228 underground holes
were drilled for a total of 47,839 metres, utilising 5
underground electric drill rigs throughout the year.
Results will be incorporated in the next resource
update study.
In addition, surface drilling tested two targets
indicated by a previous geophysical review. Drilling
to the north of Zone III showed that the main ore
bodies, previously defined by Zones II and III,
extend at least another 300 metres north beneath
thickening cover sequences. This exciting new
discovery, named Zone VIII, contains similar rock
types and mineralisation styles already seen in Zones
II and III. In 2015, 11 surface holes were drilled for
a total of 8,347 metres at Zone VIII. Results will
be incorporated in the next resource update study.
Further drilling at Zone VIII may be undertaken
from future underground development from Zone
III.
Further drilling to the north east of Zone III (2 holes
for a total of 1,202 metres) intersected small but zinc-
rich mineralisation in similar host rocks as in Zones
II and III. Further drilling will be dependent upon
a full analysis of all data including the geochemical
signatures.
Four significant geological technical studies were
undertaken in 2015:
• A geological structural study of the Caijiaying
Mine by an external consultant. The focus on this
work was to provide and assist the on-site geology
team with an improved understanding of the
structure, timings and controls on mineralisation
to assist with improved targeting for additions
to the mining resource. This
information
also assisted with improving the knowledge
of the regional structure leading to improved
exploration understanding and targeting.
• A project-wide reinterpretation of all geophysical
datasets delivering a multitude of new geophysical
images and culminating in a new solid geology
and structural interpretation of the Caijiaying
Mine area. This interpretation is dominantly
based on geophysical data and requires ongoing
testing and revision as hard surface and drill hole
data become available. It provides a 2D regional
structural and lithological framework for future
exploration planning.
13
RepoRt and accounts 2015 Plan view of the Caijiaying Zone III Mineral Resource wirefames (red) and underground development
(blue), and plan view of Zone II, V and VIII exploration targets, lease boundaries and local infrasctructure
14
Griffin MininG LiMited Long section 3D view of the Zone III Mineral Resource wireframes (Red)
and underground development and stoping (blue) looking West.
15
RepoRt and accounts 2015 • A
surface
and down-hole multi-element
lithogeochemistry project which highlighted
the value of multi-element geochemistry for
exploration targeting. The geochemistry data
accurately and cheaply maps pathfinder element
assemblages, alteration indices and lithology
discriminators at the Caijiaying Mine. These
quantifiable indices can be used to test and rank
regional exploration potential in surface rock
chip samples, in addition to identifying near
mine targets based on underground and surface
drilling.
• A new 3D geological model and Exploration
Targeting model. The development of a new
3D geological model, showing tight folding in
underground exposures, prompted a remodelling
of the existing geological model. This new model
focuses on understanding and defining the folded
and faulted pre-mineralisation architecture that
controls the subsequent location of replacement-
style zinc mineralisation. The resultant new 3D
model explains the discontinuous nature of high
grade mineralisation, predicts a sub-horizontal
primary continuity to mineralisation (rather than
down-dip as previously interpreted) and provides
significantly improved confidence into the new
resource modelling process. The new geological
model has identified 26 new discrete exploration
targets within 250 metres of the existing
underground development which are amenable
to near term drill testing.
Hebei Anglo Area
Regional target generation continued in 2015 with
geochemical surveys conducted both within and
adjacent to existing licences. Preliminary analysis
shows that there are geochemical signatures away
from the immediate area of the mine that are similar
to that observed in drill core data from the Caijiaying
Mine area. Further sampling and analysis will be
required to develop targets for future drilling.
16
Exploration in 2016
During 2016, exploration activities will continue
to focus on high-priority targets in and adjacent to
Zone III and Zone II. Many of the lodes, including
the zinc-gold lodes, remain open either along strike,
at depth, or both and these will be scheduled for
further drilling in 2016.
Geochemical analysis will continue within the
Caijiaying mine to increase the understanding of
the complexity of the orebody. Regional exploration
will continue with sampling and analysis to evaluate
targets for further consideration and drilling.
OPERATIONS
Operations were significantly impacted by two
separate fatal incidents at the Caijiaying Mine in
2015. Thorough investigations were carried out by
both Hebei Hua Ao and by the local and provincial
safety bureaus to fully understand the causes of the
incidents. Production was suspended for a total of
three months whilst these investigations were taking
place. As a consequence, the amount of ore mined in
2015 was considerably less than 2014. Meanwhile the
processing facilities were able to continue processing
long term surface stockpiles whilst mining operations
were suspended.
The installation of the new ball mill with a name
plate capacity of 750,000 tonnes of ore per annum
was completed in 2015 with commissioning at the
beginning of 2016 following the connection of a
new grid connected 35kv power line. This was the
final stage in the completion of the mill upgrade.
Following completion of this upgrade, the processing
facilities are capable of processing no less than 1.5
million tonnes of ore per year.
significantly better
With near continuous processing in 2015, mill
throughput was
in
2014 when the processing facilities were shut
for several weeks for upgrade works. Slightly
better grades and recoveries have assisted
in
lifting metal in concentrate production in 2015.
than
Griffin MininG LiMited In summary, production in 2015 was as follows:
COMMUNITY INVESTMENT
• 571,815 tonnes of ore were mined, compared to
747,775 tonnes in 2014;
• 839,713 tonnes of ore were processed, compared
to 572,390 tonnes in 2014;
• 38,560 tonnes of zinc metal in concentrate were
produced, compared to 25,901 tonnes in 2014;
• 10,363 ounces of gold in concentrate were
produced, compared to 7,623 ounces in 2014;
• 343,575 ounces of silver in concentrate were
produced, compared to 201,982 ounces in 2014;
and
• 1,785 tonnes of
lead
produced, compared to 857 tonnes in 2014.
in concentrate were
A significant milestone in the plan to move from
labour intensive airleg development to modern jumbo
development was passed in 2015 with the successful
commissioning of the first jumbo at the Caijiaying
Mine. It is being used to advance development of
the new lower link drive between Zones II and III,
ore cross-cuts and the main decline. The new jumbo
contributed significantly to a record 1,333 metres of
development achieved in May 2015. A new Manitou
Integrated Tool Carrier was also introduced in
2015 to boost the efficiency of underground service
installation.
The North and South Declines were pushed down
to the 1175 level and are now joined by a new 470
metre long link drive.
Underground development work was significantly
increased from previous years, with 4,081 metres of
capital development and 7,920 metres of operational
development completed in 2015.
Long hole open stoping continues to be the
predominant mining method with remote bogging
ensuring ore recovery from the open stopes is
maximised.
& PARTNERSHIP
The Company, through Hebei Hua Ao, has invested
heavily in the local community and instigated
best practices regarding the protection of the
environment. In this regard:
• Solid and liquid wastes are not disposed of into
the environment;
• All production water is recycled;
• Gas emissions from boilers are treated to remove
pollutants;
• Mined areas underground are back filled;
• Noise and dust from operations at the Caijiaying
Mine are strictly controlled; and
• All non-recyclable wastes
from supporting
facilities are treated in an incinerator.
These environmental best practices have been
rewarded by the Chinese government with Hebei
Hua Ao being presented with the Environmental
Award at the 2010 China Mining Conference and
the Mine Development Outstanding Achievement
Award at the 2011 China Mining Conference.
In addition Hebei Hua Ao has provided direct water
supplies to the local villagers, constructed sealed
roads to the Caijiaying Mine and nearby villages,
financed the construction of a local kindergarten,
an old peoples rest home and assisted on other
infrastructure projects.
In 2013, Griffin, through Hebei Hua Ao, instigated
a programme to create a long term industry for the
Caijiaying local village, in particular, to provide a
more sustainable annual income less reliant on the
seasonality of crops grown in the short summer
months. To that end, Hebei Hua Ao purchased
170 cows, which were already pregnant, creating
a sizeable initial herd of 217 cattle for the creation
of a dairy and cattle farm. In 2015 Hebei Hua Ao
purchased another 183 cows to bring the total herd
17
RepoRt and accounts 2015 size to over 500 head of cattle. The venture has been
an outstanding success.
Hebei Hua Ao has also assisted in the upgrade of
facilities at the local township school and set up
“Project Hope” to provide scholarships to local
students for ongoing study at primary, secondary and
tertiary levels. Expatriate workers also donate their
valuable time every week to teach English at the local
township school in their off duty hours.
Griffin estimates that the Caijiaying Mine has
provided direct and
to
over 1,000 Chinese nationals and minimised the
employment of expatriate personnel.
indirect employment
During 2015, Hebei Hua Ao paid Rmb 75 million
($12 million) in taxes, royalties, social security fees,
fines and other duties to Chinese governmental
authorities and agencies.
FinanCial
The Company and its subsidiaries (together the
“Group”) recorded;
• Revenues of $59,779,000
in 2015
(2014
$45,564,000);
• Operating profit of $4,301,000 in 2015 (2014
$6,732,000);
• Loss before tax of $940,000 in 2015 (2014 Profit
$1,021,000); and
• Loss after tax of $2,186,000 in 2015 (2014 Profit
$190,000)
With increased throughput and production, more
metal in concentrate was sold in 2015 compared
with 2014, however, metal in concentrate prices
were significantly lower in 2015 than in 2014 with
zinc metal in concentrate prices received averaging
$1,191 per tonne, down 11.5% from that received in
2014 of $1,345, silver $11.90 per oz down 30% from
that received in 2014 of $17.10, and gold $1,043 per
ounce down 17% on that received in 2014 of $1,251.
Cost of sales of $42,948,000 increased from that
incurred in 2014 of $25,345,000, which had been
impacted by the suspension in production from
August to November 2014 due to the upgrade of
the processing facilities. 267,313 (47%) more tonnes
of ore were processed in 2015 than in 2014. With
processing costs increasing by 35%, costs per tonne
of ore processed fell by 8%.
Mining and haulage costs were down on that incurred
in 2014 as a result of the suspension in mining for
three months following the two fatal incidents in
2015. However, mine servicing costs continued to
be incurred during the suspensions.
Net operating costs have fallen 7% from $13,487,000
in 2014 to $12,530,000 in 2015. This reduction in
costs has been achieved despite higher share based
option charges of $1,047,000 (2014 $316,000),
inflationary pressures; and fines and penalties
incurred following the mine fatalities.
With lower metal prices and increased cost of sales,
profits from operations fell from $6,732,000 in 2014
to $4,301,000 in 2015.
With bank lines of credit drawn down to finance
the cost of the processing plant upgrade, finance
costs have increased from $4,165,000 in 2014 to
$5,084,000 in 2015.
With a fall in the value of the Chinese Renminbi and
Sterling in 2015, foreign exchange losses of $447,000
(2014 $39,000) have been incurred.
Losses on the disposal of plant and equipment
of $48,000 were recorded in 2015 compared to
$1,835,000 following the disposal of redundant
equipment during the plant upgrade in 2014.
As a result of the aforementioned, a loss before tax
of $940,000 was recorded in 2015 compared with a
profit of $1,021,000 in 2014.
Income taxes of $1,246,000 (2014 $831,000) have
been charged in 2015. This includes a deferred
taxation provision of $813,000 (2014 $313,000).
18
Griffin MininG LiMited Basic and diluted losses per share in 2015 were 1.22
cents (2014 earnings 0.11 cents).
In 2015 8,703,103 ordinary shares in the Company
were bought at a cost of $3,875,000 and placed
in treasury. In 2014 50,000 ordinary shares were
bought back in the market for cancellation at a cost
of $30,000.
Cash and cash equivalents increased by $1,520,000
in 2015 (2014 reduction $2,960,000) with:
• Net cash inflow from operating activities in 2015
of $26,139,000 (2014 $12,754,000);
licence at Zone II. This will allow all the known
resources at and between Zones II and III to
be extracted. Development work has continued
underground from the main Zone III area towards
further resource definition
Zone II enabling
underground drilling in these areas. A new decline
is also expected to be driven in 2016 enabling
more haulage movements at the Caijiaying Mine.
Development work at Zone II is planned to begin
as soon as the new mining licence is received. It is
estimated that this work will be completed in 2016
enabling production to be doubled in 2017 from that
currently being achieved.
• $16,044,000 invested in mine development and
plant upgrades in 2015, (2014 $23,204,000); and
ACQUISITIONS
The Company continues to further explore and
develop the Caijiaying Mine area and to investigate
the acquisition of base metals projects that have the
potential to be brought into long term, economic
production for a capital cost that provides a substantial
and justifiable return on equity to shareholders,
particularly in a rising commodity price market.
A new master agreement has been signed between the
Third Geological Brigade of the Hebei Province with
Hebei Hua Ao, to examine their extensive database
for existing known deposits and prospective mining
areas and enter into commercial arrangements on
those projects.
A large number of potential ventures have been
analysed worldwide. None have been successfully
consummated for many reasons including negative
findings during due diligence, an insufficient return
calculated for the risk shareholders would need to
accept in funding a project to production, overall
risk profile and various other deficiencies in grade,
tonnes, metallurgy, depth and difficulty in mining.
• $7,601,000 expended in financing activities in
2015 mainly on the purchase of the treasury
shares and interest payments (2014 received
$9,761,000).
Attributable net assets per share at 31st December
2015 amounted to 78 cents (2014 83 cents).
strategiC review
CAIJIAYING
Caijiaying continues to grow in size and stature
with
increased processing capacity, continuing
mine development and ongoing exploration work
identifying more targets and potential for significant
additional resources. Whilst the existing Mineral
Resource Estimate confirms the availability of
extensive resources at the Caijiaying Mine for
increased production, the potential for further
resources may provide an opportunity to further
increase production at the Caijiaying Mine. This will
require further licences and permits from various
Chinese authorities which is proving increasingly
complex and time consuming to obtain.
Currently with the 1.5 million tonne upgrade
completed, every effort is being made to obtain
enhanced production permits and a new mining
19
RepoRt and accounts 2015 20
Griffin MininG LiMited Signing of the new master agreement between the Third Geological Brigade (Captain He Yuqing) and Hebei Hua Ao
(Chairman Mladen Ninkov) for the exploration and acquisition of potential new mining projects.
21
RepoRt and accounts 2015 Rupert Crowe, Director, Australian, aged 67, is a
graduate geologist from Trinity College Dublin. He
was the founding chairman and managing director of
CSA Global Pty Ltd, a mining consultancy company
founded in Ireland in 1983 and now headquartered in
Australia. He is a specialist in zinc-lead exploration
and was involved as a principal in the discovery and
development of several notable mines. He has served
on the board of four public companies listed in
Dublin, London, Vancouver and Australia.
Adam Usdan, Director, USA, aged 54, holds
an MBA from the Kellogg Graduate School of
Management at Northwestern University with
majors in Finance, Marketing, and Accounting, and
a BA in English from Wesleyan University. He is the
President of Trellus Management Company LLC,
an equity hedge fund based in the USA. Mr Usdan
founded Trellus Management in January 1994 and
has been in the investment advisory industry for over
25 years. Mr Usdan began his investment career in
1987 at Odyssey Partners, where he was responsible
for managing long/short U.S. equity (small to mid-
cap) pools of capital.
DireCtors
Mladen Ninkov, Chairman, Australian, aged 54,
holds a Master 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 the 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 the
Chairman and Managing Director of the Dragon
Capital Funds management group, a director and
Head of International Corporate Finance at ANZ
Grindlays Bank 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 has been chairman and director of a
number of both public and private mining and oil and
gas companies.
Roger Goodwin, Finance Director, British, aged
60, 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 has a strong
professional background, including that as a manager
with KPMG, with considerable public company
and corporate finance experience, and experience of
emerging markets.
Dal Brynelsen, Director, Canadian, aged 69, is
a graduate of the University of British Columbia in
Urban Land Economics. Mr. Brynelsen has been
involved in the resource industry for over 30 years. He
has been responsible for the discovery, development
and operation of several underground gold mines
during his career. Mr. Brynelsen is the President and
a director of Vangold Resources Limited.
22
Griffin MininG LiMited Dr Bo Zhou, General Manager China, Australian,
aged 53, holds a PhD in exploration geology from
Sydney University and a BSc in economic geology
from Peking University. He was Managing Director
of Sinovus Mining Ltd, an ASX listed company with
mineral interests in China. Prior to that he was the
General Manager for Guangxi Golden Tiger Mining
JV, a Sino-Australian JV gold company focussed on
Guangxi, China, controlled by Golden Tiger Mining
NL, an ASX listed company. He has also worked as
the Senior Geologist for Silk Road Resources (A
Toronto listed company), responsible for evaluating
various gold properties in Gansu Province in central
western China. Dr Zhou has considerable experience
in the Chinese resources sector.
senior exeCutives
Mark Hine, Chief Operating Officer, Australian,
aged 57, is a mining engineer having graduated from
the Western Australia School of Mines, a member of
the Australian Institute of Company Directors and
a member of the Australian Institute of Mining and
Metallurgy. He has extensive mining experience with
over 25 years of senior management roles in both
surface and underground mining operations. He
has held a number of senior positions in the mining
industry including Chief Operating Officer at Focus
Minerals Ltd, Chief Executive Officer at Golden
West Resources Ltd, Executive General Manager
Mining at Macmahon Contractors Pty Ltd, Chief
Executive Officer at Queensland Industrial Minerals
Ltd, Chief Executive Officer at Consolidated Rutile
Ltd and General Manager Pasminco, Broken Hill /
Elura Mines.
Wendy Zhang, Chief Financial Officer, Hebei
Hua Ao, aged 42, holds a Master of Accounting
degree from Macquarie University, a member of
the Certified Practising Accountant of Australia
and a qualified member of the Chinese Institute
of Certified Public Accountant for 11 years. Prior
to joining Griffin she spent the previous 4 years as
Financial Controller for Golden Tiger Mining’s
joint venture operations in China. Previously she
was Chief Accountant for Shanghai Silk Group and
subsequently Ann Taylor Shanghai.
23
RepoRt and accounts 2015 24
Griffin MininG LiMited Runxcai Jai (Mill Manager), Susan Sun (Senior Personal Assistant to Operations Manager), Mladen Ninkov
(Chairman), Rupert Crowe (Director), Adam Usdan (Director), Dal Bynelsen (Director) and Bo Zhou (Chief
Representative - China) at the processing plant’s ceramic filter with zinc concentrate stockpiles in the background
25
RepoRt and accounts 2015 DireCtors’ rePort
The Directors submit their report together with the audited consolidated financial statements of Griffin Mining Limited (“the
Company”) and its subsidiaries (“the Group”) for the year ended 31 December 2015.
FinanCial results
The Group loss before taxation, amounted to US$940,000 (2014 profit US$1,021,000). Taxation of US$1,246,000 (2014
US$831,000) has been provided. No dividend was paid in 2015 (2014 nil). US$2,186,000 has been debited to reserves (2014
credited US$190,000).
The basic loss per share amounted to 1.22 cents (2014 earnings 0.11 cents). The attributable net asset value per share at 31
December 2015 amounted to 78 cents (2014 83 cents).
With cash flows from operations being used to fund the development of the Zone II deposit and the upgrade of the processing
facilities at Caijiaying and with any surplus cash flow directed to repaying existing Chinese banking facilities used to fund the
acquisition of additional equity in, and the extension of, the joint venture in 2012, the directors do not recommend the payment
of a dividend at this time.
PrinCiPal aCtivities
The principal activity of the Group is that of mining and exploration. A review of the Group’s operations for the year ended 31
December 2015 and the indication of likely future developments are set out on pages 9 to 19.
DireCtors
The Directors of the Company during the year were:
Mladen Ninkov – Australian – Chairman
Roger Goodwin – British - Finance Director
Dal Brynelsen – Canadian
Rupert Crowe - Australian/ Irish
Adam Usdan – American (USA)
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 beneficial interests of the Directors holding office at 31 December 2015 and their immediate families in the share capital of
the Company were as follows:
Name
Ordinary
shares,
number
At 31 December 2015
Options over ordinary
shares, number
exercisable at
30 pence
40 pence
Mladen Ninkov
33,001
12,000,000
3,500,000
Dal Brynelsen
Rupert Crowe
382,001
1
900,000
900,000
-
-
Roger Goodwin
877,830
1,500,000
500,000
Adam Usdan
30,574,556
3,500,000
-
All of the Directors’ interests detailed are beneficial.
Ordinary
shares,
number
33,001
382,001
1
877,830
28,324,556
At 1 January 2015
Options over ordinary
shares, number
exercisable at
40 pence
45 pence
3,500,000
6,000,000
-
-
400,000
-
500,000
1,200,000
-
-
On 13 February 2014 options (the “40 pence options”) over 5,000,000 new ordinary shares were granted to directors and key
employees of the Company in order to retain and incentivise key personnel with managerial and operating experience in non-
standard jurisdictions in a tight mining employment market.
26
Griffin MininG LiMited
DireCtors’ rePort
Each 40 pence option will entitle the holder to subscribe for new ordinary shares in the Company at an exercise price of £0.40
per share on or before 31 December 2018. One third of these options vested on 31 December 2014 with one third vesting on 31
December 2015 and one third on 31 December 2016.
The 40 pence options will not vest if the option holder resigns or leaves the Company for cause prior to the vesting event taking
place. All the options will vest immediately upon a takeover offer being made or a change in control of the Company taking place
prior to the options expiring.
On 6 February 2015 the Board resolved to adopt a new share option scheme (the “30 pence options”) over a total of 20,000,000
new ordinary shares in the Company in order to retain and incentivise the Company’s directors and management.
Each 30 pence option will entitle the holder to subscribe for new ordinary shares in the Company at an exercise price of 30 pence
per new ordinary share on or before 31 December 2020. The 30 pence options will vest with each option holder in instalments
triggered by the following events:
i. One third of each holder’s options will vest immediately upon being granted;
ii.
A further third of each holder’s options will vest on 31 December 2016; and
iii. A further third of each holder’s options will vest on the granting of a new mining licence over Zone II at the Caijiaying
mine.
The 30 pence options will not vest if an employee or a director resigns or leaves the Company for cause prior to the vesting event
taking place.
All the 30 pence options will vest immediately upon a takeover offer being made; or a substantial change in the business of the
Company or its subsidiaries; or the sale of a substantial asset of the Company or by its subsidiaries; or a change in substantial
control of the Company taking place prior to the options expiring.
remuneration PoliCy
Remuneration of all executive and non-executive directors, officers and senior employees of the Group is determined by the
board of directors.
The Company is committed to remunerating senior executives in a manner that is market-competitive and consistent with
“Best Practice” including the interests of shareholders. Remuneration packages are based on fixed and variable components,
determined by the executives’ position, experience and performance, and may be satisfied via cash or equity.
Non-executive directors are remunerated at a level that is consistent with market and industry standards. The cash remuneration
of non-executive directors consists only of directors’ fees and no retirement benefits are payable.
The Group’s remuneration policy has been based on industry practice rather than Group performance and takes into account the
risk and liabilities assumed by the directors and executives as a result of their involvement in the speculative activities undertaken
by the Group. Directors and executives are fairly compensated for the extensive work they undertake.
No performance based bonuses were issued during the reporting year.
27
RepoRt and accounts 2015 DireCtors’ rePort
PrinCiPal risks anD unCertainties
The principal risks and uncertainties facing the Group are set out below, together with details of how these are currently mitigated.
For further information on how the Group manages risk, see pages 53 to 55.
Risk
Comment
Business
Impact
Mitigation
Economic Risk
Exposure to a fall in zinc,
gold and to a lesser extent
silver and lead metal prices.
Revenue is dependent upon metal
prices.
High
In common with other mining companies
operating in China the Group sells its
products by auction to local smelters
and agents, however, Griffin continues
to review the appropriateness of hedging
and indicative cost of put options.
Exposure to fluctuations in
the Renminbi / US dollar
exchange rate.
A fall in the value of the Renminbi
would reduce the US dollar value
of revenues, whilst an increase in
the value of the Renminbi would
increase operating cost.
Moderate
The Renminbi is loosely pegged to the
US dollar.
The Group is subject to increases
in the market prices for materials,
services and equipment.
Moderate
The Group seeks to agree long term
contracts for all major services and goods
supplied.
increases
to
Exposure
in the market prices of
materials, equipment and
services the Group uses.
Country risks
Exposure to political and
social risks in the Peoples
Republic of China (“the
PRC”).
Griffin’s assets are located in the
PRC and therefore exposed to any
adverse changes in the political
and social situations there.
changes
to
Exposure
in fiscal and regulatory
regime.
In addition to political/social risks,
the Group is exposed to changes in
permitting, environmental, health
and safety, and tax regulations
in the PRC which may result in
a more challenging, or costly,
operating environment.
Low
High
The Group has operated in the PRC for
18 years in which time the country has
been relatively stable.
Griffin actively engages with the local
PRC authorities and agencies to identify
and minimise the impact of changes in
PRC regulations.
Operational risk
Reliance on Third Party
Contractors
28
Griffin uses a number of unrelated
for
contractors, particularly
its
and drilling
mining, haulage
activities. Each of these activities
has inherent risk, including injury or
death to the contractors employees.
Such events cause a total shutdown
of all operational activities which
may take a substantial time to
recommence.
Moderate Griffin has an extensive Occupational
Health and Safety Department
in
conjunction with a Mining Manager
and his team of underground foreman
who constantly oversee all contractors
activities.
Griffin MininG LiMited DireCtors’ rePort
Risk
Comment
Business
Impact
Mitigation
Operational risk continued
Exposure to mining
hazards
The Group is exposed to a number of
risks and hazards typically associated
with mining for example rock falls,
flooding and mechanical breakdowns.
Moderate
Reliability of Mineral
Resources and Ore
Reserves
The calculation of Mineral Resources
and Ore Reserves involves significant
assumptions and estimates that may
prove inaccurate.
Low
to
Griffin’s operational teams continually
monitor mining and other risks, and
report
senior management who
report to the Board of directors, taking
immediate and appropriate measures
to minimise any such risks and hazards
identified. In addition, the Group’s
operations are regularly monitored by the
PRC Safety Bureaus.
Griffin’s Mineral Resources and Ore Reserve
estimates are prepared by third party
consultants, based in Australia, who are
deemed “experts” under the JORC Code.
Other
Exposure to a single
operation
is reliant upon a single
Griffin
operation, being
the Caijiaying
zinc gold mine in the PRC. Factors
affecting operations at Caijiaying
have an impact upon the Group.
Licence administration Griffin,
its
through
subsidiary
companies, holds a number of mining,
exploration and other licenses and
permits to operate. These normally
for ongoing
include
operation
periodic
renewal. Renewals are not guaranteed.
conditions
and
require
Finance
Key management
The Group has through its local
subsidiary drawn down bank loans
which
in common with general
banking practice in the PRC are
for one year. The renewal / rolling
over of these loans each year is not
guaranteed.
The management of Caijiaying is
reliant on a small number of key
executives, both inside and outside
of China. Their death, retirement or
departure may have a significant effect
on the operations of the Company
Moderate
High
It is the Company’s policy to pursue
growth opportunities through expansion
in the Caijiaying area, as well as reviewing
acquisition opportunities which can be
shown to be value accretive.
All licensing requirements are kept under
review with operational staff liaising with
local PRC authorities to ensure conditions
are adhered to and applications made
timely and in good order.
Moderate
The Group seeks to comply with all
loan requirements, including the prompt
payment of
interest, and maintains
good relations with the banks providing
facilities to the Group.
Moderate
Griffin has contractual arrangements with
all key employees which are renewed on a
regular basis
Geological and
Historical Information
loss of historical
The
and/or
geological information would have
a very significant impact on the
operations of the Company
Low
Griffin has instituted a complete back
up system relating to all geological and
operational data in Perth with CSA
Global. It is updated on a daily basis.
29
RepoRt and accounts 2015 DireCtors’ rePort
CorPorate governanCe
Although incorporated in Bermuda and therefore not obliged to comply with the code of best practice established by the UK
Corporate Governance Code issued by the Financial Reporting Committee, 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. In particular, in view of the Company’s size and the limited number of directors, the
Company has not formally established: an audit committee; a remuneration committee; and a nominations committee. However,
the non-executive directors informally fulfil the roles and responsibilities normally expected of such committees.
The board of directors includes a number of non-executive directors who, with the exception of Adam Usdan, other than their
shareholding, are considered to be independent as their shareholdings are less than 0.2% of the Company’s issued share capital
and are 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. All directors are subject to re-appointment annually at each annual general meeting of the Company’s
shareholders.
Various safeguards and checks have been instigated as part of the Company’s system of financial control. These include:
•
•
•
•
•
•
preparation of regular financial reports and management accounts
preparation and review of capital and operational budgets
preparation of regular operational reports
prior approval of capital and other significant expenditure
regular review and assessment of foreign exchange risk and requirements
regular review of commodity prices and assessment of hedging requirements
auDitor
Grant Thornton UK LLP 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.
30
Griffin MininG LiMited DireCtors’ rePort
statement oF DireCtors’ resPonsibilities in resPeCt oF the aCCounts
Bermudan 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 and enable them to ensure that the financial statements comply with the Bermuda Companies Act
1981 as amended. 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included in the
Company’s website. Legislation in Bermuda and the United Kingdom governing the preparation and dissemination of financial
statements may differ from the legislation in other jurisdictions.
This report was approved by the Board and signed on its behalf by:
Roger Goodwin
Finance Director and Company Secretary
13th April 2016
31
RepoRt and accounts 2015
rePort oF the inDePenDent auDitor
inDePenDent auDitor rePort to the members oF griFFin mining limiteD
We have audited the Group financial statements (the financial statements) of Griffin Mining Limited for the year ended 31
December 2015 which comprise the consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of financial position, consolidated statement of changes in equity, consolidated cash flow statement,
the accounting policies and the related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Section 90(2) 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 auditor’s 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 auDitor
As explained more fully in the Statement of Directors’ Responsibilities in respect of the accounts set out on page 31, the directors
are responsible for the preparation of the Group financial statements which give a true and fair view. Our responsibility is to
audit and express an opinion on the Group financial statements in accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for
Auditors.
sCoPe oF the auDit oF the FinanCial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes
an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall
presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report
to identify material inconsistencies with the audited financial statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the
audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
oPinion on the FinanCial statements
In our opinion, the financial statements give a true and fair view of the state of the Group’s affairs as at 31 December 2015 and of
its loss for the year then ended in accordance with IFRSs as adopted by the European Union.
Grant Thornton UK LLP
Statutory Auditor
Chartered Accountants
London
13th April 2016
32
Griffin MininG LiMited
ConsoliDateD inCome statement
For the year ended 31 December 2015
(expressed in thousands US dollars)
Notes
2015
$000
2014
$000
Revenue
Cost of sales
Gross profit
Net operating expenses
Profit from operations
Losses on disposal of plant and equipment
Foreign exchange (losses)
Finance income
Finance costs
Other income
(Loss) / profit before tax
Income tax expense
(Loss) / profit after tax
Basic (loss) / earnings per share (cents)
Diluted (loss) earnings per share (cents)
59,779
45,564
(42,948)
(25,345)
16,831
(12,530)
20,219
(13,487)
1
1
1
2
4
5
6
7
4,301
(48)
(447)
202
(5,084)
136
(940)
8
(1,246)
(2,186)
(1.22)
(1.22)
9
9
6,732
(1,835)
(39)
223
(4,165)
105
1,021
(831)
190
0.11
0.11
33
RepoRt and accounts 2015
ConsoliDateD statement oF ComPrehensive inCome
For the year ended 31 December 2015
(expressed in thousands US dollars)
(Loss) / profit for the year
2015
$000
(2,186)
2014
$000
190
Other comprehensive income that will be reclassified to profit or loss
Exchange differences on translating foreign operations
(2,967)
(281)
Other comprehensive income for the period, net of tax
(2,967)
(281)
Total comprehensive income for the period
(5,153)
(91)
34
Griffin MininG LiMited
ConsoliDateD statement oF FinanCial Position
As at 31 December 2015
(expressed in thousands US dollars)
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets – Exploration interests
Current assets
Inventories
Receivables and other current assets
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital
Share premium
Contributing surplus
Share based payments
Shares held in treasury
Chinese statutory re-investment reserve
Other reserve on acquisition of non controlling interests
Foreign exchange reserve
Profit and loss reserve
Total equity attributable to equity holders of the parent
Non-current liabilities
Long-term provisions
Deferred taxation
Finance lease
Current liabilities
Trade and other payables
Finance lease
Bank loans
Total current liabilities
Notes
2015
$000
2014
$000
10
11
12
13
14
15
18
19
20
21
20
22
210,252
1,870
212,122
7,182
3,194
24,062
34,438
208,339
1,914
210,253
17,477
3,540
23,371
44,388
246,560
254,641
1,790
71,310
3,690
1,363
(3,875)
1,595
(29,346)
8,068
85,350
139,945
2,433
2,630
7,454
12,517
28,977
1,982
63,139
94,098
1,790
71,310
3,690
3,064
-
1,686
(29,365)
10,957
84,794
147,926
2,582
1,953
10,720
15,255
26,563
1,161
63,736
91,460
Total equities and liabilities
246,560
254,641
Attributable net asset value per share to equity holders of parent
23
$0.78
$0.83
The accounts on pages 33 to 57 were approved by the Board of Directors and signed on its behalf by:
Mladen Ninkov
Chairman
13th April 2016
Roger Goodwin
Finance Director
35
RepoRt and accounts 2015
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A
Griffin MininG LiMited
ConsoliDateD Cash Flow statement
For the year ended 31 December 2015
(expressed in thousands US dollars)
Notes
Net cash flows from operating activities
(Loss) / profit before taxation
Foreign exchange losses
Finance income
Finance costs
Adjustment in respect of share based payments
Depreciation, depletion and amortisation
Losses on disposal of equipment
Decrease / (increase) in inventories
Decrease in receivables and other current assets
Increase in trade and other payables
Net cash inflow from operating activities
Taxation paid
Cash flows from investing activities
Interest received
Payments to acquire – mineral interests
Payments to acquire – plant and equipment
Payments to acquire – office equipment
Payments to acquire intangible fixed assets – exploration interests
Net cash outflow from investing activities
Cash flows from financing activities
Purchase of shares for cancellation
Purchase of shares for treasury
Interest paid
Finance lease
Proceeds from bank loans
Repayment of bank loans
Net cash inflow from financing activities
5
6
16
10
5
10
10
10
11
2015
$000
(940)
447
(202)
5,084
1,047
6,808
48
10,295
804
2,748
2014
$000
1,021
39
(223)
4,165
316
6,211
1,835
(9,496)
1,256
7,630
26,139
12,754
(974)
(2,271)
202
(8,960)
(7,215)
(3)
(68)
(16,044)
-
(3,875)
(4,324)
(2,573)
3,171
-
(7,601)
223
(6,041)
(17,285)
(11)
(90)
(23,204)
(30)
-
(3,342)
(1,398)
21,186
(6,655)
9,761
Increase / (decrease) in cash and cash equivalents
1,520
(2,960)
Cash and cash equivalents at the beginning of the year
Effects of exchange rates
Cash and cash equivalents at the end of the year
Cash and cash equivalents comprise bank deposits
Bank deposits
23,371
(829)
24,062
26,278
53
23,371
24,062
23,371
Included within net cash flows of $1,520,000 (2014 $2,960,000) are foreign exchange losses of $447,000 (2014 losses $39,000)
which have been treated as realised.
37
RepoRt and accounts 2015
aCCounting PoliCies
basis oF aCCounting
The accounts have been prepared in accordance with applicable International Financial Reporting Standards as issued by the
International Accounting Standards Board and as adopted by the European Union. The significant accounting policies adopted
are detailed below:
aCCounting Convention
The accounts have been prepared under the historical cost convention, except for certain financial assets which are measured at
fair value.
new anD reviseD stanDarDs that are eFFeCtive For annual PerioDs beginning on or
aFter 1 january 2015
A number of new and revised standards are effective for annual periods beginning on or after 1 January 2015. Information on
these new standards is presented below.
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
These amendments clarify the application of certain offsetting criteria in IAS 32, including:
•
•
the meaning of ‘currently has a legally enforceable right of set-off’
that some gross settlement mechanisms may be considered equivalent to net settlement
The amendments have been applied retrospectively in accordance with their transitional provisions. As the Group does not
currently present any of its financial assets and financial liabilities on a net basis using the provisions of IAS 32, these amendments
had no material effect on the consolidated financial statements for any period presented.
Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)
The amendments clarify that an entity is required to disclose the recoverable amount of an asset (or cash generating unit)
whenever an impairment loss has been recognised or reversed in the period. In addition, they introduce several new disclosures
required to be made when the recoverable amount of impaired assets is based on fair value less costs of disposal, including:
•
•
additional information about fair value measurement including the applicable level of the fair value hierarchy, and a
description of any valuation techniques used and key assumptions made
the discount rates used if fair value less costs of disposal is measured using a present value technique
The amendments have been applied retrospectively in accordance with their transition provisions.
going ConCern
The financial statements have been prepared on a going concern basis. As at 31 December 2015, Hebei Hua Ao (a subsidiary of
the Company) had bank loans outstanding of $63,139,000. Having previously rolled over each of the bank facilities, Hebei Hua
Ao expects to roll over the existing facilities for a further 12 months and since 31 December 2015 has demonstrated its ability
to service these by paying all interest when falling due and rolling over a loan of Rmb 30m ($4.8m) in January 2016. Having
considered the cash resources, banking facilities and forecasts for the remainder of the Hebei Hua Ao joint venture term, the
directors do not expect any going concern issues to arise.
ConsoliDation basis
The Group accounts consolidate the accounts of the Company and all its subsidiary undertakings drawn up to 31 December each
year. Subsidiaries are entities over which the Group has the power to control the financial and operating policies so as to obtain
benefits from its activities. The Group obtains and exercises control through voting rights.
Unrealised gains on transactions between the Group and its subsidiaries are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements
of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
38
Griffin MininG LiMited aCCounting PoliCies
ConsoliDation basis (ContinueD)
Acquisitions of subsidiaries are dealt with by the acquisition method. The acquisition method involves the recognition at fair
value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of
whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the
assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which
are also used as the bases for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after
separating out identifiable intangible assets.
Non controlling interests, presented as part of equity, represent the excess of the purchase price paid to acquire rights over the
non-controlling interests in subsidiary companies..
revenue
Revenue is measured by reference to the fair value of consideration received or receivable by the Group and comprises amounts
received, net of VAT and production royalties, from sales of metal concentrates to third party customers. Sales are made on a cash
on delivery / collection basis and are recognised on collection or delivery of the concentrate from the Group’s processing facilities.
non Current assets
Intangible assets – exploration cost
Expenditure on licences, concessions and exploration incurred on areas of interest by subsidiary undertakings are carried as
intangible assets until such time as it is determined that there are both technically feasible and commercially viable reserves within
each area of interest and the necessary finance in place, at which time such costs are transferred to property, plant and equipment
to be amortised over the expected productive life of the asset. The Group’s intangible assets are subject to periodic review at
least annually by the directors for impairment. Exploration, appraisal and development costs incurred in respect of each area of
interest which are determined as unsuccessful are written off to the income statement.
Property, plant and equipment
Mine development expenditure for the initial establishment of access to mineral reserves, together with capitalised exploration,
evaluation and commissioning expenditure, and costs directly attributable to bringing the mine into commercial production are
capitalised to the extent that the expenditure results in significant future benefits.
Property, plant and equipment are shown at cost less depreciation and provisions for the impairment of value (see note 10).
Residual values
Material residual value estimates are updated as required, but at least annually whether or not the asset is re-valued.
Depreciation
On 21 May 2012 the term of Hebei Hua Ao’s joint venture business licence was extended to 12 October 2037 effective from 25
June 2012. The pre existing business licence terminated in 2019. Prior to 25 June 2012, all costs capitalised (mineral interests,
mill and mine equipment) within an area of interest, were amortised over the current estimated economic reserve of the area of
interest on a unit of production basis.
In view of the extension of Hebei Hua Ao’s business licence, thereby increasing the term of the joint venture, the economic lives
of all non current tangible assets have been reassessed and depreciation rates have been revised with effect from 25 June 2012 to
reflect the increased term of operations, extractable resource, and economic lives of the assets as follows:
1.
2.
Mine acquisition, development, licence, pre production and land use rights - on a unit of production
Plant and buildings - over 25 years on a straight line basis with a 10% residual value
39
RepoRt and accounts 2015
aCCounting PoliCies
0non-Current assets (ContinueD)
3.
4.
5.
Dry tailings facility held under finance lease- over 15 years on a straight line basis with no residual value
Mechanical equipment - over 10 years on a straight line basis with a 10% residual value
All other equipment, including vehicles - over 5 years on a straight line basis with a 10% residual value
Impairment
A review for impairment indicators at each reporting date is undertaken. In the event of impairment indicators being identified,
an impairment test is carried out to assess whether the net book value of the capitalised costs in each area of interest is covered
by the discounted future cash flows from reserves within that area of interest. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and
value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit
and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment
testing procedures are directly linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of
future reorganisations and asset enhancements. Estimate and assumptions used in the determining whether an asset has become
impaired are set out below.
Impairment assessments are based upon a range of estimates and assumptions:
ESTIMATES / ASSUMPTIONS BASIS
Future production
Commodity prices
Exchange rates
Discount rates
mine Closure Costs
Proven and probable reserves and resource estimates together with processing capacity
Forward market and longer term price estimates
Current market exchange rates
Cost of capital risk
Mining operations are generally required to restore mine and processing sites at the end of their lives to a condition acceptable to
the relevant authorities and consistent with the Group’s environmental policies. Whilst the Group strives to maintain, and where
possible, enhance the environment of the Group’s processing sites, provision is made for site restoration costs in the accounts in
accordance with local requirements.
inventories
Inventories are valued at the lower of cost or net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
1.
2.
3.
Consumable stores and spares, at purchase costs on a first in first out basis
Concentrate stockpiles at cost of direct materials, power, labour, and a proportion of site overhead
Ore stockpiles at cost of direct material, power, labour contractor charges and a proportion of site overhead
FinanCial assets
Financial assets held by the Group are loans and receivables.
Financial assets are assigned to the different categories on initial recognition, depending on the characteristics of the instrument
and its purpose. A financial instrument’s category is relevant for the way it is measured and whether resulting income and
expenses are recognised in profit or loss or in other comprehensive income.
Financial assets are reviewed by management individually and an assessment of whether a financial asset is impaired is made at
least at each reporting date. All income and expense relating to financial assets are recognised in the income statement line item
“finance costs” or “finance income” respectively.
40
Griffin MininG LiMited aCCounting PoliCies
FinanCial assets (ContinueD)
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are classified as current assets or non-current assets based on their maturity date. Loans and receivables are
classified as either ‘trade and other receivables’, ‘cash’, or ‘other financial assets’ in the statement of financial position. On initial
recognition loans and receivables are recognised at fair value plus transaction costs. They are subsequently measured at amortised
cost using the effective interest method, less provision for impairment. Any change in their value is recognised in profit or loss.
The Group’s other receivables fall into this category of financial instruments.
FinanCial liabilities
The Group’s financial liabilities include bank loans, trade and other payables, which are measured at amortised cost using the
effective interest rate method. On initial recognition financial liabilities are recognised at fair value net of transaction costs.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument.
All interest related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included
in the income statement line items “finance costs” or “finance income”.
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 and associates, operate in China, the United Kingdom, and Australia. The functional
and presentation currency of the parent is US dollars.
Foreign currency transactions by Group companies are recorded in their functional currencies at the exchange rate ruling at the
date of the transaction.
Monetary assets and liabilities have been translated at rates in effect at the statement of financial position date. Any realised or
unrealised exchange adjustments have been charged or credited to profit or loss. Non-monetary items measured at historical cost
are translated using the exchange rate at the date of the transaction. Non-monetary items measured at fair value are translated
using the exchange rates at the date when the fair value was determined.
On consolidation the accounts of overseas subsidiary undertakings are translated into the presentation currency of the Group
at the rate of exchange ruling at the reporting date and income statement items are translated at the average rate for the year.
The exchange difference arising on the retranslation of opening net assets is recognised in other comprehensive income and
accumulated in the foreign exchange reserve. All other translation differences are taken to profit or loss.
The balance of the foreign currency translation reserve relating to an operation that is disposed of is reclassified from equity to
profit or loss at the time of the disposal.
equity
Equity comprises the following:
1.
2.
“Share capital” represents the nominal value of equity shares.
“Share premium” represents the excess over nominal value of the fair value of consideration received for equity shares,
net of expenses of the share issue.
3.
“Contributing surplus” is a statutory reserve for the maintenance of capital under Bermuda company law and was created
on a reduction in the par value of the Company’s ordinary shares on 15 March 2001.
4.
5.
“Share based payments” represents equity-settled share-based remuneration until such share options are exercised.
“Foreign exchange reserve” represents the differences arising from translation of investments in overseas subsidiaries.
41
RepoRt and accounts 2015 aCCounting PoliCies
equity (ContinueD)
6.
“Chinese statutory re-investment reserve” represents a statutory retained earnings reserve under PRC law for future
investment by Hebei Hua-Ao.
7.
“other reserves on acquisition of non controlling interests” represents the excess of the purchase price paid to acquire non
controlling interest rights over the non controlling interests in subsidiary companies.
8.
“Profit and loss reserve” represents retained profits and losses.
equity settleD share baseD Payments
All goods and services received in exchange for the grant of any share-based remuneration are measured at their fair values. Fair
values of services are indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at
the grant date and excludes the impact of non-market vesting conditions (for example, production upgrades).
All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to “Share based
payments” in the statement of financial position.
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication
that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting.
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital.
For the financial year ended 31 December 2015 the total expense recognised in profit or loss arising from share based transactions
was $1,047,000 (2014: $316,000).
signiFiCant juDgements anD estimates
In formulating accounting policies the directors are required to apply their judgement, and where necessary engage professional
advisors, with regard to the following significant areas:
•
•
•
•
Impairment review assumptions, property, plant and equipment (note 10). Impairments are assessed by comparison of the
cash generating unit (the Caijiaying Mine) carrying amounts against the value of future discounted cash flows expected to
be derived from this unit. The value of the cash flows are estimated by direct reference to the current prevailing value of
the commodities extracted. Based on current production and costs the directors have determined that the Group requires
the market price of zinc to be above $1,980 per tonne with gold, silver and lead prices remaining at current prevailing
levels, to avoid an impairment charge.
Impairment review assumptions, exploration interests (note 11). Impairments are assessed by reference to exploration
results carried out in an area of interest. Where such exploration indicates that there are no indications of mineralisation
within the area of interest, provision is made for impairment in value. There were no indicators of impairment in the
Group’s areas of interest.
Provision for mine closure costs (note 18) have been made in accordance with the rules and regulations of the Peoples
Republic of China at a rate of Rmb0.5 per tonne of estimated resources. The expected amount of resource due to be
extracted during the life of the mine is based on estimated rates of extraction which take into account reported measured,
indicated and inferred levels of resource, the term of the Hebei Hua Ao joint venture and current capability of the
extractive machinery currently in use at the mine.
The determination of the value of Finance Leased Asset (note 10), and attributable Finance Lease Interest (note 20)
is assessed from future expected utilisation of the asset, assuming half of all tailings will be treated by the asset and the
Group’s inherent rate of interest on bank loans in China.
42
Griffin MininG LiMited aCCounting PoliCies
signiFiCant juDgements anD estimates (ContinueD)
•
Non-controlling interests (note 27) are determined by reference to the underlying agreements and practice, with the
allocation of the purchase consideration on acquisition of non-controlling interests and extension of the Hebei Hua
Ao Joint Venture between that capitalised to mineral interests and that charged to reserves by reference to the impact
of future cashflows. Following the acquisition of Griffin’s Chinese partner’s equity interests in the Hebei Hua Ao Joint
Venture in 2012 and a reappraisal of the arrangements with the Chinese partners, the relationship with them is now in the
nature of a service provider facilitating Hebei Hua Ao’s operations in China rather than that of non-controlling interests.
In line with this new arrangement an annual service charge is paid to the Chinese partners, however, due to the potential
variables the Directors are unable to estimate what this will be in any future year.
The directors continually monitor the basis on which their judgements are formulated. Where required they will make
amendments to these judgements. Where judgements and estimates are amended between accounting periods, full disclosure of
the financial implications are given within the relevant notes to the Group accounts.
Cash anD Cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
DiviDenDs
Dividend distributions payable to equity shareholders are included in “other short term financial liabilities” when the dividends
are approved in a directors meeting prior to the reporting date.
taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on
the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on
the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries,
associates and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is
probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as
other income tax credits to the group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable
that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred
tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they
are enacted or substantively enacted at the reporting date.
Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the income statement, except
where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) in which case the
related deferred tax is also charged or credited directly to other comprehensive income or equity.
segment rePorting
In identifying its operating segments, management generally follows the Group’s service lines, which represent the main products
produced by the Group. Management consider there to be only one operating segment being the operations at the Caijiaying
Mine based in China with production of zinc concentrate, and lead concentrate with associated precious metals credits. All
activities of the Group are reported through management and the executive directors to the Board of directors of the Company.
The measurement policies the Group uses for Segment reporting under IFRS 8 are the same as those used in its financial
statements.
43
RepoRt and accounts 2015 aCCounting PoliCies
segment rePorting (ContinueD)
Corporate assets which are not directly attributable to the business activities of Caijiaying Mine are not allocated to the Chinese
segment but are reviewed in light of operating expenses by the region in which they occur. In the financial periods under review,
this primarily applies to the Group’s head office and intermediary holding companies within the Group.
There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.
leaseD assets
Finance leases
The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards
of ownership of the leased asset. Where the Group is a lessee in this type of arrangement, the related asset is recognised at the
inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental
payments, if any. A corresponding amount is recognised as a finance lease liability.
See accounting policy on non-current assets and depreciation and note 10 for the depreciation methods and useful lives for assets
held under finance leases. The interest element of lease payments is charged to profit or loss, as finance costs over the period of
the lease.
44
Griffin MininG LiMited notes to the FinanCial statements
1. segmental rePorting
The Group has one business segment, the Caijiaying zinc gold mine in the People’s Republic of China. All sales and costs of
sales in 2015 and 2014 were derived from the Caijiaying zinc gold mine.
REVENUES
China
Zinc concentrate sales
Lead and precious metals concentrate sales
COST OF SALES
China
NET OPERATING EXPENSES
China
Australia
European Union
2015
$000
59,779
43,240
16,539
59,779
2014
$000
45,564
33,734
11,830
45,564
(42,948)
(25,345)
(7,433)
(320)
(4,777)
(12,530)
All revenues, cost of sales and operating expenses charged to profit and loss relate to continuing operations.
TOTAL ASSETS
China
Australia
European Union
CAPITAL EXPENDITURE
China
European Union
2. ProFit From oPerations
Profit from operations is stated after charging
Staff costs
Fair values of options granted to directors and management
Average number of persons employed by the Group in the year
2015
$000
244,496
340
1,724
246,560
16,243
3
16,246
2015
$000
6,478
1,047
No.
371
(9,139)
(149)
(4,199)
(13,487)
2014
$000
251,223
711
2,707
254,641
23,416
11
23,427
2014
$000
6,533
316
No.
368
45
RepoRt and accounts 2015
notes to the FinanCial statements
3. DireCtors’ anD key Personnel remuneration
The following fees and remuneration were receivable by the Directors holding office and key personnel engaged during the year:
Share Total
Fees Salary Pension
& social
2015
based
security payments
Fees Salary Pension
& social
Share
based
security payments
Total
2014
costs
costs
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Mladen Ninkov*
Dal Brynelsen
Rupert Crowe
112
198
102
-
-
-
-
-
-
Roger Goodwin
112
474
109
Adam Usdan
Key personnel
87
-
611
474
-
1,298
611
1,772
-
109
14
123
642
41
41
82
158
754
239
143
777
245
115
212
97
-
-
-
115
522
76
-
964 2,158
615
522
83 1,395
-
1,103
1,047 3,553
615
1,625
-
-
-
115
-
115
4
119
221
-
-
32
-
253
63
316
336
212
97
784
76
1,505
1,170
2,675
Adam Usdan was appointed a director on 19th March 2014.
*Keynes Capital, the registered business name of Keynes Investments Pty Limited as trustee for the Keynes Trust, received fees
under a consultancy agreement of $1,878,000 (2014 $2,058,000), for the provision of advisory and support services to Griffin
Mining Limited and its subsidiaries during the year. Mladen Ninkov is a director and employee of Keynes Investments Pty
Limited.
No share options were exercised by the directors in 2015 or 2014
4. loss on DisPosal oF Plant anD equiPment
Loss on disposal of plant and equipment
2015
$000
48
2014
$000
1,835
During the upgrade of the processing facilities at Caijiaying in 2014, the old crushers and ancillary equipment with a net book
value of $1,835,000 were scrapped.
5. FinanCe inCome
Interest on bank deposits
6. FinanCe Costs
Interest payable on short term bank loans
Finance lease interest
2015
$000
202
2015
$000
4,324
760
5,084
2014
$000
223
2014
$000
3,342
823
4,165
In 2015 $264,000 (2014 $326,000) of interest incurred during the upgrade of the processing plant was capitalised to property,
plant and equipment at a rate of 6.15%
46
Griffin MininG LiMited
notes to the FinanCial statements
7. other inCome
Scrap and sundry other sales
8. inCome tax exPense
(Loss)/profit for the year before tax
Expected tax expense at a standard rate of PRC income tax of 25% (2014 25%)
Adjustment for tax exempt items:
- Income and expenses outside the PRC not subject to tax
Adjustments for short term timing differences:
- In respect of accounting differences
- Other
Adjustments for short term timing differences
Withholding tax on intercompany dividends and charges
Current taxation expense
Deferred taxation expense
Origination and reversal of temporary timing differences
Total tax expense
2015
$000
136
2015
$000
(940)
(235)
662
(202)
78
113
17
433
813
813
1,246
2014
$000
105
2014
$000
1,021
255
1,043
(922)
160
-
(18)
518
313
313
831
The parent company is not resident in the United Kingdom for taxation purposes. Hebei Hua-Ao paid income tax in the PRC
at a rate of 25% in 2015 (25% in 2014) based upon the profits calculated under Chinese generally accepted accounting principals
(Chinese “GAAP”).
9. loss / earnings Per share
The calculation of the basic loss/earnings per share is based upon the loss/earnings attributable to ordinary shareholders divided
by the weighted average number of shares in issue during the year. The calculation of diluted loss/earnings per share is based on
the basic loss/earnings per share on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.
Reconciliation of the loss/earnings and weighted average number of shares used in the calculations are set out below:
2015
2014
Loss Weighted Per share
amount
(cents)
number of
shares
Average
$000
Earnings Weighted Per share
amount
(cents)
number of
shares
Average
$000
Basic loss/earnings per share
Loss/earnings attributable
to ordinary shareholders
Dilutive effect of securities
Options
(2,186) 179,041,830
(1.22)
190 175,066,140
0.11
-
-
-
-
-
-
Diluted loss/earnings per share
(2,186) 179,041,830
(1.22)
190 175,066,140
0.11
47
RepoRt and accounts 2015
notes to the FinanCial statements
10. ProPerty, Plant anD equiPment
At 31 December 2013
Foreign exchange adjustments
Additions during the year
Transfer rehabilitation deposit
Disposals
Depreciation charge for the year
At 31 December 2014
Foreign exchange adjustments
Additions during the year
Transfer rehabilitation deposit
Disposals
Depreciation charge for the year
At 31 December 2015
At 31 December 2013
Cost
Accumulated depreciation
Net carrying amount
At 31 December 2014
Cost
Accumulated depreciation
Net carrying amount
At 31 December 2015
Cost
Accumulated depreciation
Net carrying amount
Mineral
interests
Mill and
mobile mine
equipment
Office
furniture &
equipment
Total
$000
$000
$000
$000
157,352
(263)
6,008
32
-
(3,278)
159,851
(4,528)
8,960
32
-
(3,696)
160,619
174,810
(17,458)
157,352
180,536
(20,685)
159,851
184,078
(23,459)
160,619
36,088
(152)
17,285
-
(1,835)
(2,910)
48,476
(2,913)
7,215
-
(48)
(3,108)
49,622
50,209
(14,121)
36,088
64,558
(16,082)
48,476
67,676
(18,054)
49,622
4
-
12
-
-
(4)
12
-
3
-
-
(4)
11
86
(82)
4
98
(86)
12
101
(90)
11
193,444
(415)
23,305
32
(1,835)
(6,192)
208,339
(7,441)
16,178
32
(48)
(6,808)
210,252
225,105
(31,661)
193,444
245,192
(36,853)
208,339
251,855
(41,603)
210,252
Mineral interests comprise the Group’s interest in the Caijiaying ore bodies including cost on acquisition, plus subsequent
expenditure on licences, concessions, exploration, appraisal and construction of the Caijiaying mine including expenditure
for the initial establishment of access to mineral reserves, commissioning expenditure, and direct overhead expenses prior to
commencement of commercial production and together with the end of life restoration costs.
The office furniture and equipment disclosed above relates solely to the fixed assets of the Company and China Zinc Pty Ltd.
During 2013 plant and equipment with a deemed value of $12,880,000 were acquired under a finance lease, upon which
depreciation of $1,820,000 (2014 $634,000) has been provided. At 31 December 2015 the net carrying amount of this equipment
was $10,408,000 (2014 $11,911,000).
The Group assesses the carrying value of the mineral interests, mill and mobile mine equipment at least annually, and more
frequently in the event of any indications of impairment, by reference to discounted cash flow forecasts of future revenue and
expenditure for each business segment. With falling commodity prices indicating a possible impairment in the net carrying value,
the directors have reassessed the net carrying value of capitalised cost, at 31 December 2015. These forecasts are based upon
both past and expected future performance, available resources and expectations for future markets. In estimating the discounted
future cash flows from the continuing operations at the Caijiaying mine the following principal assumptions were made:
48
Griffin MininG LiMited
notes to the FinanCial statements
10. ProPerty, Plant anD equiPment (ContinueD)
−
−
Future market prices for zinc of $2,200 per tonne and gold of $1,200 per troy ounce.
Doubling of throughput to 1,500,000 tonnes of ore by 2019.
− Mine life to end of the business licence in 2037 with ore mined and processed with grades based upon the 2015 depleted
mineral resource estimate summarised on page 12.
Costs based upon past performance and that budgeted for 2016.
Discount interest rate of 6.14%
−
−
11. intangible assets
China – Zinc / gold exploration interests
At 1 January 2014
Foreign exchange adjustments
Amount provided in year
Additions during the year
At 31 December 2014
Foreign exchange adjustments
Amounts provided in year
Additions during the year
At 31 December 2015
$000
1,852
(8)
(19)
89
1,914
(112)
-
68
1,870
Intangible assets represent cost on acquisition, plus subsequent expenditure on licences, concessions, exploration, appraisal and
development work. Where expenditure on an area of interest is determined as unsuccessful such expenditure is written off to
profit or loss. 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. Upon economically exploitable mineral deposits
being established, sufficient finance will be required to bring such discoveries into production. At 31 December 2015 $nil (2014
$19,000) had been provided and charged to the income statement in respect of the above exploration costs.
12. inventories
Underground ore stocks
Surface ore stocks
Concentrate ore stocks
Spare parts and consumables.
2015
$000
2,381
2,340
82
2,379
7,182
All inventories are expected to be sold, used or consumed within one year of the balance sheet date.
13. reCeivables anD other Current assets
Advance to Zhangjiakou Guoxin Enterprise Management and Service Center
Other receivables
Taxation
Prepayments
2015
$000
1,343
150
1,127
574
3,194
2014
$000
3,708
11,957
13
1,799
17,477
2014
$000
1,426
159
586
1,369
3,540
During the year $307,000 was credited (2014 $2,613,000 incurred) in service charges with Zhangjiakou Guoxin Enterprise
Management and Service Center.
49
RepoRt and accounts 2015
notes to the FinanCial statements
14. share CaPital
AUTHORISED:
2015
2014
Number
$000
Number
$000
Ordinary shares of US$0.01 each
1,000,000,000
10,000
1,000,000,000
10,000
CALLED UP ALLOTTED AND FULLY PAID:
Ordinary shares of US$0.01 each
At 1 January
Bought back in for cancellation
At 31 December
179,041,830
1,790
179,091,830
1,791
-
-
(50,000)
(1)
179,041,830
1,790
179,041,830
1,790
During 2014 50,000 ordinary shares were bought in for cancellation from the market under a buy back programme at an
average price of 36.3 UK pence ($0.595).
15. shares helD in treasury
At 1 January
Bought back in during the period
At 31 December
2015
2014
Number
$000
Number
$000
-
8,703,103
8,703,103
-
3,875
3,875
-
-
-
-
-
-
On 11 February 2015 3,000,000 of the Company’s ordinary shares were purchased at a price of 26.5p per share.
On 13 February 2015 4,203,103 of the Company’s ordinary shares were purchased at a price of 26.5p per share.
On 1 May 2015 1,500,000 of the Company’s ordinary shares were purchased at a price of 40.0p per share.
16. share oPtions anD warrants
At 1 January
2015
Number
Granted/
(Exercised) /
(lapsed)
Number
Options exercisable at 30 pence per share to 31 December 2020
-
20,000,000
Options exercisable at 40 pence per share to 31 December 2018
5,000,000
-
Options exercisable at 45 pence per share to 28 February 2015
10,000,000
(10,000,000)
At 31 December
2015
Number
20,000,000
5,000,000
-
The following table shows the number and weighted average exercise price of all the unexercised share options and warrants
at the year end:
15,000,000
10,000,000
25,000,000
2015
Number Weighted average
exercise price
Pence
2014
Number
Weighted average
exercise price
Pence
Outstanding at 1 January
Lapsed during the year
Granted during the year
Outstanding at 31 December
15,000,000
(10,000,000)
20,000,000
25,000,000
43.3
(45.0)
30.0
32.2
10,000,000
-
5,000,000
15,000,000
45.0
-
40.0
43.3
50
Griffin MininG LiMited
notes to the FinanCial statements
16. share oPtions anD warrants (ContinueD)
The estimated value of the options exercisable at 40p up to 31 December 2018, which vested in 3 tranches of 1,666,667 each,
were 7.4p, 7.9p and 8.4p.
The estimated value of the options exercisable at 30p up to 31 December 2020, which vested in 3 tranches of 6,666,666 each,
were 6.2p, 7.2p and 6.8p.
Inputs into the Binomial valuation model were as follows:
Share price
Exercise price
Expected volatility
Risk free yield
Dividend yield
Options expiring
31 December 2020
Options expiring
28 February 2018
26.5p
30.0p
35%
0.9%
0%
33.0p
40.0p
36%
1.3%
0%
Expected volatility was determined by calculating the historical volatility of the Company’s share price with reference to the
correlation with the zinc price and zinc price volatility over the same period. The Binomial model used assumes that the
options will be exercised early when the share price exceeds the exercise price by a multiple of two.
The Group recognised a total expense of $1,047,000 (2014 $316,000) during the year ended 31 December relating to equity
settled share option scheme transactions.
17. DiviDenDs
No dividends were paid in 2015 (2014 nil).
18. long-term Provisions
prOvisiOns FOr mine ClOsure COsts
At 1 January
Transfer property plant and equipment (note 10)
Foreign exchange adjustments
At 31st December
2015
$000
2,582
32
(181)
2,433
2014
$000
2,591
-
(9)
2,582
Provision for mine closure and rehabilitation costs have been made in accordance with the laws and regulations of China at a
rate of Rmb 0.5 per tonne of estimated resources.
19. DeFerreD taxation
At 1 January
Foreign exchange adjustments
Charge for the year
At 31 December
2015
$000
1,953
(136)
813
2,630
2014
$000
1,646
(6)
313
1,953
Deferred taxation is provided in full on temporary timing differences under the liability method using a tax rate of 25%.
The deferred taxation provision arises on accelerated depreciation in the PRC deductable for taxation purposes.
51
RepoRt and accounts 2015
notes to the FinanCial statements
20. FinanCe lease
Amounts falling due in more than one year
Amounts falling due within one year
2015
$000
7,454
1,982
9,436
2014
$000
10,720
1,161
11,881
Under the terms of an agreement Hebei Hua Ao pays Rmb21.32 per wet tonne treated by a dry tailings facility at Caijiaying.
At the end of the agreement term in February 2021, this facility becomes the property of Hebei Hua Ao with no further
payment. In determining the total liability it is assumed that one half of future production over the term of the agreement
will be treated by the dry tailings facility. In determining the value of the dry tailings facility and applicable interest a deemed
interest rate of 6.6% has been applied.
21. traDe anD other Payables
Trade creditors
Other creditors
Accruals
2015
$000
21,040
6,739
1,198
28,977
2014
$000
16,040
6,069
4,454
26,563
All amounts are short term. The carrying values of all trade and other payables are considered to be a reasonable approximation
of fair value.
22. bank loans
Bank loans falling due within one year
2015
$000
63,139
2014
$000
63,736
The bank loans are repayable within one year under revolving facilities and are unsecured. The bank loans carried interest as
follows:
Zhangjiakou Commercial Bank
Bank of Communications
Bank of China
2015
$000
15,400
%
8.7
2014
$000
%
16,343
10.44
23,100
4.785
21,245
6.43
24,639
63,139
5.82
26,148
6.6
63,736
23. attributable net asset value / total equity Per share
The attributable net asset value / total equity per share has been calculated from the consolidated net assets / total equity of the
Group at 31 December 2015 of $139,945,000 ($147,926,000 at 31 December 2014) divided by the number of ordinary shares
in issue at 31 December 2015 of 179,041,830 (179,041,830 at 31 December 2014).
52
Griffin MininG LiMited
notes to the FinanCial statements
24. risk management
The Group is exposed to a variety of financial risks which result from its operating and investing activities. The Group’s risk
management is coordinated by its senior management and executive directors and focuses on actively securing the Group’s short
to medium term cash flows.
Foreign Currency Risk
The majority of the Group’s operational and financial cash flows are denominated in Chinese Renminbi and United States
Dollars with sterling bank deposits held to cover future sterling expenditure estimates.
Currently the Group does not carry out any significant operations in currencies outside the above.
The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange
exposure and will consider hedging significant foreign currency exposure should the need arise. In addition, the conversion of
Renminbi into foreign currencies is restricted and subject to the rules and regulations of foreign exchange control promulgated
by the government of the Peoples Republic of China.
Sterling bank deposits translated into United States Dollars at the closing rate are as follows:
Short term bank deposits
2015
$000
571
2014
$000
794
The following table illustrates the sensitivity of the net results for the year and equity in regards to the Group’s sterling deposits
and the sterling US Dollar exchange rate. It assumes a + / - 10% change in the sterling exchange rate for the year ended 31
December 2015. These changes are considered to be reasonable based on observation of current market conditions for the year
ended 31 December 2015. The sensitivity analysis is based upon the Group’s sterling deposits at each reporting date.
If sterling had strengthened against the US Dollar by 10% (2014 10%) this would have had the following impact:
Net result for the year and on equity
2015
$000
63
If sterling had weakened against the US Dollar by 10% (2014 10%) this would have the following impact:
Net result for the year and on equity
2015
$000
(52)
2014
$000
88
2014
$000
(72)
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the
analysis above is considered to be indicative of the Group’s exposure to currency risk.
With the Renminbi exchange rate linked to the value of the US dollar and with relatively small amounts held in Australian
dollars, the effect on the net results and equity of changes in Renminbi and Australian dollar exchange rates are not expected to
be significant.
53
RepoRt and accounts 2015
notes to the FinanCial statements
24. risk management (ContinueD)
Foreign Currency Risk (continued)
Foreign currency denominated financial assets and liabilities, translated into US Dollars at the closing rate, are as follows:
2015
GBP
$000
Rmb
AusD
$000
$000
GBP
$000
2014
Rmb
$000
896
32,385
(250)
(96,965)
338
(11)
915
22,711
(162)
(97,038)
646
(64,580)
327
753
(74,327)
AusD
$000
708
(13)
695
Financial assets
Financial liabilities
Short term exposure
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s bank deposits with floating
interest rates. The Group currently does not have an interest rate hedging policy.
The following table illustrates the sensitivity of the net results for the year and equity to a reasonably possible change in interest
rates of + 300% and - 100% (2014 + 300% - 100%), with effect from the beginning of the year. These changes are considered to
be reasonable based on observation of current market conditions within which the Group operates.
The sensitivity analysis is based upon the Group’s deposits at each balance sheet date:
Net result for the year
2015
2014
Plus 300% Minus 100%
Plus 300% Minus 100%
$000
620
$000
(202)
$000
690
$000
(223)
Fixed and non interest bearing financial assets and liabilities are as follows:
2015
2014
Floating Non interest
bearing
interest rate
Total
Floating Non interest
bearing
interest rate
Total
$000
$000
$000
$000
$000
$000
Financial Assets
Cash at bank
Other receivables
24,062
-
24,062
23,371
-
23,371
-
3,194
3,194
-
3,540
3,540
Total Financial Assets
24,062
3,194
27,256
23,371
3,540
26,911
Bank loans
Finance lease liabilities
(63,139)
(9,436)
-
-
(63,139)
(9,436)
(63,736)
(11,881)
-
-
(63,736)
(11,881)
Trade and other payables
-
(28,977)
(28,977)
-
(26,563)
(26,563)
Total Financial Liabilities
(72,575)
(28,977) (101,552)
(75,617)
(26,563)
(102,180)
Net Financial (liabilities)
(48,513)
(25,783)
(74,296)
(52,246)
(23,023)
(75,269)
54
Griffin MininG LiMited
notes to the FinanCial statements
24. risk management (ContinueD)
Commodity risk
The Group is exposed to the risk of changes in commodity prices and in particular that for zinc, gold and to a lesser extent silver
and lead. The Group currently sells its metal concentrate production by way of open auctions in China. The Group did not hedge
its metal production in 2015 or in 2014.
The following table illustrates the sensitivity of the net results for the year and equity to a reasonably possible change in the
market price of zinc, gold and silver of plus 20% and minus 20% (2014 plus 20% and minus 20%), with effect from the beginning
of the year. These changes are considered reasonable based upon observation of current market conditions within which the
Group operates. This sensitivity analysis is based upon the Group’s sales in each year.
Net result for the year - zinc
6,742
(6,742)
5,121
(5,121)
2015
2014
Plus 20% Minus 20%
Plus 20% Minus 20%
$000
$000
$000
$000
Net result for year - gold
Net result for year - silver
Credit risk
1,656
(1,656)
1,424
(1,424)
632
(632)
511
(511)
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its financing activities, including deposits with banks and financial
institutions, foreign exchange transactions and other financial instruments. The Group does not have trade receivables and does
not hold collateral as security.
Credit risk from balances with banks and financial institutions is managed by the Board. Investment of surplus funds are made
only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed
by the Griffin Board on a regular basis. The limits are set to minimise the concentration of risks and therefore mitigate financial
loss through potential counterparty failure. No material exposure is considered to exist by virtue of the possible non performance
of the counterparties to financial instruments.
25. CaPital management anD ProCeDures
The Group’s capital management objectives are:
• To ensure the Group’s ability to continue as a going concern;
• To increase the value of the assets of the Group: and
• To enhance shareholder value in the Company and returns to shareholders.
The achievement of these objectives is undertaken by developing existing ventures and identifying new ventures for future
development. The Company will also undertake other transactions where these are deemed financially beneficial to the Company.
The directors continue to monitor the capital requirements of the Group by reference to expected future cash flows. Capital for
the reporting periods under review is summarised in the consolidated statement of changes in equity. The directors consider the
capital of the Group to be the total equity attributable to the equity holders of the parent of $139,945,000 at 31st December 2015.
55
RepoRt and accounts 2015
notes to the FinanCial statements
26. FinanCial instruments
The Group does not enter into derivative transactions such as interest rate swaps, forward rate agreements or forward currency
contracts. Funds in excess of immediate requirements are placed in US dollar, Chinese Renminbi, and sterling short term fixed
and floating rate deposits. The Group has overseas subsidiaries operating in China and Australia, whose costs are denominated
in local currencies.
In the normal course of its operations the Group is exposed to commodity price, foreign currency and interest rate risks.
The Group places funds in excess of immediate requirements in US dollar, Chinese Renminbi, 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.
Commodity prices are monitored on a regular basis to ensure the Group receives fair value for its products.
The Group held the following investments in financial assets and financial liabilities:
FINANCIAL ASSETS
Loans and receivables
Cash and cash equivalents
FINANCIAL LIABILITIES
Loans
Trade and other payables
27. subsiDiary ComPanies
2015
$000
3,194
24,062
27,256
72,575
28,977
101,552
2014
$000
3,540
23,371
26,911
75,617
26,563
102,180
At 31 December 2015 , Griffin Mining Limited had interests in the share capital of the following principal subsidiary companies.
Name
China Zinc Pty Ltd
China Zinc Limited
Hebei Hua’ Ao Mining
Industry Company Ltd*
Class of
Share held
Ordinary
Ordinary
Panda Resources Ltd
Ordinary
Hebei Sino Anglo Mining
Development Company Ltd*
Proportion of
shares held
100%
100%
88.8% **
100%
90%
Nature of
business
Country of
incorporation
Service company
Australia
Holding company
Hong Kong
Base and precious metals
mining and development
China
Holding company
England
Mineral
exploration and development
China
* China Zinc Ltd, China Zinc Pty Ltd and Panda Resources Ltd are directly owned by the Company. China Zinc Ltd has a
controlling interest in Hebei Hua’ Ao Mining Industry Company Ltd, see below, and Panda Resources Ltd has a 90% controlling
interest in Hebei Sino Anglo Mining Development Company Ltd.
** The joint venture contract establishing the Hebei Hua’ Ao Mining Industry Company Ltd originally provided that the foreign
party (China Zinc) received 60% of the cash flows, in accordance with its share in the equity interest in the joint venture. With
effect from 25 June 2012, China Zinc receives 88.8% of the cash flows and profits of Hebei Hua Ao. On 21 May 2012 the term
of the joint venture’s business licence extended to 12 October 2037.
56
Griffin MininG LiMited
notes to the FinanCial statements
27. subsiDiary ComPanies (ContinueD)
Under the terms of the agreement dated 21 May 2012, Griffin’s Chinese Partners are obliged to provide various services to
facilitate Hebei Hua Ao’s operations in China and as such the amounts credited of $307,000 (2014 paid $1,958,000) are included
in net operating costs rather than attributable to non-controlling interests. Likewise the amounts due at 31st December 2015 of
$4,325,000 (2014 $4,966,000) are included in other payables rather than due to non-controlling interests within equity within the
Consolidated Statement Of Financial Position.
28. Commitments
At 31 December 2015 the Group had capital commitments of $4,029,000 (31 December 2014 $4,762,000).
57
RepoRt and accounts 2015
58
Griffin MininG LiMited Zone VIII looking towards Caijiaying Village
59
RepoRt and accounts 2015 CorPorate inFormation
Principal office:
6th & 7th Floors, 60 St James’s Street, London, SW1A 1LE. UK.
Telephone: + 44 (0)20 7629 7772 / Facsimile: + 44 (0)20 7629 7773
Email: griffin@griffinmining.com Web site: www.griffinmining.com
Registered office:
Clarendon House, 2 Church Street, Hamilton, HM11. Bermuda.
China Zinc office:
Directors:
Level 9, BGC Centre, 28 The Esplanade, Perth, WA 6000. Australia.
Telephone: + 61(0)8 9321 7143 Facsimile: + 61 (0)8 9321 7035
Mladen Ninkov (Chairman)
Roger Goodwin (Finance Director)
Dal Brynelsen
Rupert Crowe
Adam Usdan
Company Secretary:
Roger Goodwin
Nominated Adviser
And Broker for AIM:
Panmure Gordon (UK) Limited
One New Change, London, EC4M 9AF. UK.
Joint Broker:
Auditors:
Solicitors:
Cantor Fitzgerald Europe
1 Churchill Place, Canary Wharf, London, E14 5RB. UK.
Grant Thornton UK LLP
Grant Thornton House, Melton Street, London, NW1 2EP. UK.
Bird & Bird
8/F China World Office 1, Jianguomenwai Dajie
Chaoyang District, Beijing 10004 PRC.
Conyers Dill & Pearman
Clarendon House, 2 Church Street, Hamilton, HM11. Bermuda.
Addleshaw Goddard LLP
Milton Gate, 60 Chiswell Street, London, EC1Y 4AG. UK.
King & Wood Malleson
9/F, Hutchison House, 10 Harcourt Road, Central, Hong Kong.
Bankers:
HSBC Bank plc
27-32 Poultry, London, EC2P 2BX. UK.
The Hong Kong and Shanghai Banking Corporation Limited
HSBC Main Building, 1 Queen’s Road Central, Hong Kong.
The Bank of Bermuda Ltd
6 Front Street, Hamilton, HM11. Bermuda.
UK Registrars
And Transfer Agents:
Capita Registrars (Jersey) Limited
12 Castle Street, St Helier, Jersey, JE2 3RT. UK.
60
Griffin MininG LiMited