Contents
Chairman’s statement
Overview
Caijiaying
IntroductIon
development
mIneral resource estImates
GeoloGy
exploratIon
operatIons
sustainability, envirOnment and lOCal COmmunity
FinanCial results
strategiC review
overvIew
caIjIayInG
acquIsItIons and Further projects
clImate chanGe
COrpOrate gOvernanCe
report oF the audIt commIttee
report oF the remuneratIon commIttee
direCtOrs
seniOr exeCutives
direCtOrs’ repOrt
independent auditOrs’ repOrt
COnsOlidated inCOme statement
COnsOlidated statement OF COmprehensive inCOme
COnsOlidated statement OF FinanCial pOsitiOn
COnsOlidated statement OF Changes in equity
COnsOlidated Cash FlOw statement
nOtes tO the FinanCial statements
COrpOrate inFOrmatiOn
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84
Griffin Mining Limited (“Griffin” or “the Company”) 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’s shares are quoted on the Alternative Investment Market (AIM)
of the London Stock Exchange (symbol GFM).
Registered in Bermuda, number: 13667.
Registered Office: Clarendon House, 2 Church Street, Hamilton HM11, Bermuda
United Kingdom office: 8 Floor, 54 Jermyn Street, London. SW1Y 6LX
1
RepoRt and accounts 2021
2
Griffin MininG LiMited Caijiaying Mine with rehabilitated Tailing Facilities 1 and 2
3
RepoRt and accounts 2021 Chairman’s statement
It gives me great pleasure to present to you, the shareholders
in place making the transport of materials, employees
of Griffin Mining Limited (“Griffin” or the “Company”), the
and contractors over Provincial borders at the least,
Annual Report and Accounts of the Company for the 2021
extraordinarily difficult and, at the most, impossible.
calendar and financial year (the “Annual Report”). In terms
Furthermore, China has prevented the entrance of any
of the Company’s financial and operational performance, it
foreign national into the country who does not have a pre-
has been a stellar year, even more extraordinary considering
existing work permit and then, only with 28 days hotel
Zone II has yet to be fully developed or brought into
quarantine. What this reinforces in simple terms is the
production and in light of the continuing restrictions
dedication and loyalty of both our on-site staff and our ex-
imposed by the Covid-19 pandemic in China.
pat staff. The former who, in effect, now live permanently
In 2021, in comparison to 2020:
• Revenue was 61% higher at $121,648,000;
• Operating profit was 143% higher at $36,925,000;
at camp as they are wary of not being permitted to return
to the Caijiaying Mine site should quarantine be imposed
unilaterally at local, county, city or Provincial level. The
latter ex-pats, who now spend 3 to 6 months away from their
partners, children and extended family, allow the Company
• Profit before tax was 152% higher at $36,526,000;
to keep operating. I should add, all this when there is a
• Profit after tax was 185% higher at $25,376,000; and
• Basic earnings per share was 182% higher at 14.53 cents
per share.
Operationally, record amounts of ore were mined and
processed in 2021 and metal production of our 2 largest
revenue producers, zinc and gold, were substantially higher
30,000 person shortage in the Australian mining industry
where most of our ex pat staff are based. In particular, and
most of all, I would like to thank John Steel, our new Chief
Operating Officer, Paul Benson, our Chief Geologist, and
Wendy Zhang, our site Chief Financial Officer, for their
Herculean efforts over the past 12 months. All these on-
site and ex-pat individuals have displayed the extent of their
loyalty and I am grateful on behalf of everyone involved
than in the previous year:
with the Company.
• Ore mined was up 14% at 971,492 tonnes;
• Ore hauled was up 19% at 979,783 tonnes;
• Ore processed was up 20% at 985,404 tonnes;
• Zinc metal in concentrate produced was up 28% at
41,587 tonnes; and
Needless to say, the safety and welfare of the Company’s
workforce remains the overwhelming priority of the
Company. Underground and surface operations operated
safely and consistently in 2021 without any major incidents.
With the Company’s extensive Covid-19 pandemic controls,
there have been no outbreaks of Covid-19 at the Caijiaying
• Gold metal in concentrate produced was up 28% at
Mine to date. With assistance from local Chinese authorities
14,447 ounces.
all personnel have received Chinese manufactured Covid-19
This bodes very well for the future results of the Company
when Zone II is commissioned and in full production.
Since the grant of the new mining licence over Zone II in
January 2021, the Company has been working continuously
and tirelessly on obtaining approval for the design and
development of Zone II. That approval is expected shortly
and drive development is planned to begin on the 1 July
2022. In the interim, the first drill platform for resource
drilling at Zone II was constructed in September 2021 and
diamond drilling commenced in early October 2021.
vaccinations.
Operational highlights throughout the year included the
acquisition of land for the construction of new Tailings
Dam 4 and the completion of the construction of the bridge
to provide access to the area, the installation and extension
of the paste pipe reticulation system and the continuation of
the programme to further modernise and increase safety at
the Caijiaying Mine. This included the introduction of 10
specific PRC Kuang Anquan (“KA”) wet brake vehicles for
personnel transportation underground, further increasing
mine safety, traffic management and the underground
What makes the above results truly exceptional is the
environment. In addition, a new 40 tonne low emission
continuing Covid-19 crisis in China and the quarantine
boiler used to heat the site processing, administration and
procedures the various levels of government have put
other buildings as well as the underground workings was
4
Griffin MininG LiMited commissioned and a new electrical boiler was installed and
with these amazing individuals – the deceased Rupert Crowe
commissioned at the Caijiaying Mine Camp reducing the
and Bill Mulligan, the mining thoroughbred Dal Brynelsen
Company’s carbon emissions footprint.
and the indefatigable Roger Goodwin. To quote Bill Curry,
Importantly, probably the most significant non-operational
event of the past year was the activism of the major
shareholders of the Company to effect change at the board
level with the intention of seeking to extract greater value
from the Company and their shareholding. To that end, 3
new independent directors were appointed to the board.
Clive Whiley was appointed to the board in August 2021
an American football star, “It’s not for the bucks that I drive
myself to the limits of my ability. It’s so that I can go back to
the locker room, after having gone those last 35 yards and
won the game and walk back in there with my arm around a
teammate and know that we did that together, that we both
gave it a little more than we really had. Now that may sound
real phony but I promise you it’s the reason we play.”
and Linda Naylor and Dean Moore in May 2022. I would
To the shareholders, my overwhelming wish is that Covid-19
like to welcome all 3 formally to the board and wish them
disappear from concern, that there be peace in Eastern
every success and a productive and enjoyable time on the
Europe, the World economy avoids severe recession and
board.
With this substantial change to the board I’d like to state
that I will always be enormously grateful and humbled by
the contribution and comradery the directors, whom I’m
inflation, that the zinc price remains high and Zone II hits
our long awaited full production target. May the Year of the
Tiger make it just so.
proud to call “my friends”, gave so freely, warmly, genuinely
Mladen Ninkov
and passionately. It made this impossible dream possible and
Chairman
bearable and I shall always be so grateful I had this journey
12 May 2022
5
RepoRt and accounts 2021 overview
Griffin Mining Limited (“Griffin” or “the Company”) is a
held by the Company’s joint venture partner, Zhangjiakou
mining and investment company, incorporated in Bermuda,
Yuanrun Enterprise Management Consulting Service Co.,
whose shares are quoted on the Alternative Investment
Ltd (“Yuanrun”), thereby allowing their retention under
Market of the London Stock Exchange (“AIM”).
PRC law within the Hebei Anglo Group. Should a mining
The major asset of the Company is an 88.8% interest in
Hebei Hua Ao Mining Industry Company Limited (“Hebei
Hua Ao”) through its wholly-owned Hong Kong subsidiary,
licence be granted over this area at any point in the future,
this new licence may be contractually transferred back to
Hebei Anglo at the Company’s option.
China Zinc Limited (“China Zinc”), which holds licences,
The Company continues to aggressively explore, expand
including the mine and processing facilities near Caijiaying
and develop the Caijiaying Mine whilst also investigating
Village (the “Caijiaying Mine”) in the People’s Republic of
potential acquisitions of mining projects that are capable,
China (“PRC” or “China”).
The Company also holds a 90% interest in Hebei Sino Anglo
Mining Development Company Limited (“Hebei Anglo”),
which has interests in exploration licences immediately
surrounding the Hebei Hua Ao licence area which are
through either advanced exploration or mining expertise
held within the company, of being brought into production
to meet the Company’s historically preset, economic returns
to shareholders.
Location of the Caijiaying Mine, People’s Republic of China
6
Griffin MininG LiMited Caijiaying
INTRODUCTION
The Caijiaying Mine is an operating zinc, gold, silver
and lead mine, together with processing plant, camp and
supporting facilities, located approximately 250 kilometres
by road, north-west of Beijing in Hebei Province in the
through its wholly owned UK subsidiary Panda Resources
Limited (“Panda”), has a 90% interest in Hebei Anglo
whilst Yuanrun holds 10%. As Griffin investigates other
areas of interest and projects in China, Hebei Anglo may be
used to invest in any such projects.
PRC. The Caijiaying Mine is easily accessible by separate
The Caijiaying Mine was commissioned on time and on
freeways from Beijing. The site has significant water supplies,
budget in 2005. Numerous upgrades to the Caijiaying Mine
two 35,000 volt power lines connected to the electricity grid,
have taken place since commissioning leading to the current
full connectivity to fixed and mobile telecommunications
name plate mill throughput capacity of 1.5 million tonnes of
systems and broadband access for internet services. It is
ore per annum. With mining and haulage rates from Zone
63 kilometres from Chongli, the location of the outdoor
III limited, this capacity has yet to be fully utilised. It is
events of the 2022 Winter Olympic and Paralympic Games,
expected to begin being utilised in 2023 as production from
connected via a new high speed train link with Beijing.
the development of Zone II becomes available.
Climatic conditions are not severe with warm summers and
Since the third quarter of 2021, the underground operations
cold, dry winters, enabling the Caijiaying Mine to operate
in Zone III have been able to extract at an annualised rate
throughout the year.
DEVELOPMENT
the equivalent of over one million tonnes of Zinc-Gold ore
per annum.
With the grant of a new mining licence in December 2020
Hebei Hua Ao is a contractual co-operative joint venture
over the combined Zone II and Zone III areas, application
company established in 1994 under PRC law. Initially,
has been made for the approval of the mine design plan for
Griffin held 60% of Hebei Hua Ao (through its wholly
the new Zone II area, approval of which is expected by 1
owned subsidiary China Zinc) with the remaining 40% held
July 2022. This will allow the development of Zone II to
by Yuanrun, the shareholders of which are the Zhangjiakou
commence which will enable at least 1.5 million tonnes of
City People’s Government and the Third Geological
ore per annum to be extracted from the Caijiaying Mine in
Brigade of Hebei Province (the “Third Brigade”).
the beginning in 2023.
The initial operating 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 China Zinc,
purchased an additional 28.8% interest in Hebei Hua
Ao from Yuanrun in 2012. Griffin now holds an 88.8%
equity interest in Hebei Hua Ao and Yuanrun retains an
11.2% residual interest compensated via a service contract
for accounting purposes for services rendered, resulting
in Hebei Hua Ao being in the nature of a wholly owned
subsidiary of the Company. In addition, and as part of this
purchase agreement, the term of the Hebei Hua Ao joint
venture was extended to October 2037. In order to comply
with the new PRC law on Chinese-Foreign Equity Joint
Ventures, Hebei Hua Ao will be required to convert to a
limited liability equity company with an indefinite life by 1
January 2025.
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,
7
RepoRt and accounts 2021 Caijiaying (contInued)
MINERAL RESOURCE ESTIMATES
Caijiaying Zone III Remaining Mineral Resources
Zone III Domain 1 Zn Resources > 1% Zn
Tonnes
(Mt)
Zn
(%)
18.7
13.5
14.2
46.4
4.5
4.1
3.5
4.1
Pb
(%)
0.2
0.2
0.2
0.2
Ag
(g/t)
23.0
18.0
22.0
21.0
Au
(g/t)
0.6
0.5
0.4
841
548
502
0.5
1,891
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
42
23
28
93
13,621
370
7,736
217
10,089
175
31,446
763
Zone III Domain 2: Au Resources > 0.5 g/t Au
Tonnes
(Mt)
Zn
(%)
0.6
0.6
0.8
0.8
Tonnes
(Mt)
Zn
(%)
18.7
13.5
14.8
47.0
4.5
4.1
3.4
4.0
Pb
(%)
0.1
0.1
Pb
(%)
0.2
0.2
0.2
0.2
Ag
(g/t)
19.0
19.0
Au
(g/t)
2.8
2.8
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
5 1 386
57
5 1 386
57
Zone III: Total
Ag
(g/t)
Au
(g/t)
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
23.0
18.0
22.0
21.0
0.6
0.5
0.5
841 42
13,621
370
548 23
7,736
217
507 29
10,475
232
0.5
1,896 94 31,832
819
Caijiaying Zone II Remaining Mineral Resources
Zone II Oxide: Zn Resources > 1% Zn
Tonnes
(Mt)
Zn
(%)
1.2
1.6
2.8
2.9
2.5
2.7
Pb
(%)
0.5
0.5
0.5
Ag
(g/t)
19.0
17.0
18.0
Au
(g/t)
0.3
0.1
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
35
6 751
11
39
8 830
7
0.2
74
14 1,581
17
Zone II Fresh: Zn Resources > 1% Zn
Tonnes
(Mt)
11.5
26.4
37.9
Tonnes
(Mt)
12.7
27.9
40.7
Zn
(%)
3.8
3.7
3.7
Zn
(%)
3.7
3.6
3.7
Pb
(%)
0.9
1.0
1.0
Pb
(%)
0.9
1.0
0.9
Ag
(g/t)
27.0
30.0
29.0
Au
(g/t)
0.3
0.4
0.4
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
436
109
10,085
96
977
253
25,108
350
1,413 362
35,193
446
Zone II Total
Ag
(g/t)
27.0
29.0
28.0
Au
(g/t)
0.3
0.4
0.4
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
471
115
10,836
107
1,015
261
25,938
356
1,486 376
36,774
463
Category
Measured
Indicated
Inferred
Sub-Total
Category
Inferred
Sub-Total
Category
Measured
Indicated
Inferred
Sub-Total
Category
Indicated
Inferred
Total
Category
Indicated
Inferred
Sub-Total
Category
Indicated
Inferred
Total
8
Griffin MininG LiMited
Caijiaying Zone V Mineral Resources
Zone V Zn Resources > 1% Zn
Category
Inferred
Total
Tonnes
(Mt)
6.0
6.0
Zn
(%)
3.2
3.2
Pb
(%)
1.4
1.4
Ag
(g/t)
56.0
56.0
Au
(g/t)
0.6
0.6
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
191 84
10,819
116
191 84
10,819
116
Caijiaying Zone VIII Mineral Resources
Zone VIII Domain 1: Zn Resources > 1% Zn
Tonnes
(Mt)
Zn
(%)
6.1
6.1
4.4
4.4
Pb
(%)
0.7
0.7
Ag
(g/t)
36.0
36.0
Au
(g/t)
0.5
0.5
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
272 41
7,112
106
272 41 7,112
106
Zone VIII Domain 2: Au Resources > 0.5 g/t Au
Tonnes
(Mt)
Zn
(%)
0.7
0.7
0.7
0.7
Tonnes
(Mt)
Zn
(%)
6.8
6.8
4.0
4.0
Pb
(%)
0.7
0.7
Pb
(%)
0.7
0.7
Ag
(g/t)
45.0
45.0
Au
(g/t)
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
2.4
5 5
1,012
54
2.4 5 5 1,012
54
Zone VIII Total
Ag
(g/t)
37.0
37.0
Au
(g/t)
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
0.7
277
46
8,124
160
0.7
277 46 8,124
160
Category
Inferred
Total
Category
Inferred
Total
Category
Inferred
Total
Caijiaying Combined Global Mineral Resources February 2021
Category
Measured
Indicated
Inferred
Total
Tonnes
(Mt)
Zn
(%)
18.7
26.2
55.5
100.4
4.5
3.9
3.6
3.8
Pb
(%)
0.2
0.5
0.8
0.6
Ag
(g/t)
23.0
22.0
31.0
27.1
Au
(g/t)
Zn Metal
(kt)
Pb Metal
(kt)
Ag Metal Au Metal
(kOz)
(kOz)
0.6
0.4
0.5
841 42
13,621
370
1,019 138
18,572
324
1,990 421
55,356
864
0.5
3,850 600
87,549
1,558
Notes:
The Caijiaying Mineral Resources are based on resource modelling work completed by CSA Global Pty Ltd and reported in 2022 in accordance
with JORC 2012 guidelines. The information in this report that relates to Mineral Resources is based on, and fairly reflects, information compiled
by Mr Serikjan Urbisinov a Competent Person, who is a Member of the Australian Institute of Geoscientists. Mr Serikjan Urbisinov is a full-
time employee of CSA Global Pty Ltd. Mr Serikjan Urbisinov has sufficient experience relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 edition of the Australasian
Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr Serikjan Urbisinov consents to the
disclosure of the information in this report of the matters based on his information in the form and context in which it appears.
9
RepoRt and accounts 2021
Caijiaying (contInued)
MINERAL RESOURCE ESTIMATES
Underground mine production continues to be the focus at
Zone III while mine development applications at Zone II
and extension of retention licence applications at Zone V
and VIII progress. The Global Mineral Resource estimate
initially reported on 26 January 2021, includes Zones II, III,
V and VIII at a zinc cut-off grade of 1% and, amended for
mining depletion at Zone III as of 31st December 2021.
In summary the Global Measured, Indicated and Inferred
Mineral Resource estimate totals 100.4 million tonnes at
3.8% Zn, 0.6% Pb, 27.1g/t Ag and 0.5g/t Au, resulting in
total contained metal of approximately 3.85 million tonnes
of zinc metal, 0.6 million tonnes of lead, 87.5 million ounces
of silver and 1.56 million ounces of gold.
Zone III
The Zone III Mineral Resource estimate is based on
geological interpretation and metal grade estimation that
utilises all underground mapping and diamond drill data up
to 30 September 2021 and depleted for mining activity up to
31 December 2021. The 2021 depleted Measured, Indicated
and Inferred Zone III Mineral Resource estimate totals 47.0
million tonnes at 4.0% Zn, 0.2% Pb, 21.0g/t Ag and 0.5g/t
Au, resulting in total metal of approximately 1.9 million
tonnes of zinc, 0.1 million tonnes of lead, 31.8 million ounces
of silver and 0.82 million ounces of gold. Underground
diamond drilling continues to focus on resource definition
2021 remains unchanged at 40.7 million tonnes at 3.7% Zn,
0.9% Pb, 28.0g/t Ag and 0.4g/t Au, resulting in total metal of
approximately 1.5 million tonnes of zinc, 0.4 million tonnes
of lead, 36.8 million ounces of silver and 0.46 million ounces
of gold.
A total of 109 surface diamond drillholes, 91 reverse
circulation surface drillholes and 163 underground diamond
drillholes define the Zone II deposit at an average spacings of
approximately 40 metres x 40 metres for a combined total of
91,383 metres of drilling.
Zone V
The Inferred Zone V Mineral Resource estimate as
announced on 26 January 2021 totals 6.0 million tonnes at
3.2% Zn, 1.4% Pb, 56.0g/t Ag and 0.6g/t Au resulting in
total metal of approximately 0.2 million tonnes of zinc metal,
0.08 million tonnes of lead, 10.8 million ounces of silver
and 0.12 million ounces of gold. Zone V is located within
the Company’s Retention Licence, see below, just 0.8km
west of Zone II. A total of 34 surface diamond drillholes, 3
reverse circulation surface drillholes with an average spacing
of approximately 25 metres x 100 metres define the Zone V
deposit for a combined total of 15,242 metres of historical
drilling.
Zone VIII
and grade control drilling within the main mine corridor
The Inferred Zone VIII Mineral Resource estimate totals 6.8
above the 1,000mRL (“RL” refers to mean sea level) mine
million tonnes at 4.0% Zn, 0.7% Pb, 37.0g/t Ag and 0.7g/t Au
licence boundary. In addition, secondary inferred drill targets
resulting in total metal of approximately 0.3 million tonnes
have been tested to the east of Zone III. Further drilling of
of zinc, 0.05 million tonnes of lead, 8.1 million ounces of
these inferred drill targets is required and will continue in
silver and 0.16 million ounces of gold. A total of 44 diamond
2022. During 2022 it is anticipated that the underground
drillholes with a spacing of 50 to 100 metres define the Zone
diamond drilling activity will incrementally transition from
VIII deposit for a combined total of 32,193 metres.
Zone III to Zone II.
The Retention Licence containing Zones V and VIII covers
A total of 189 surface diamond drillholes, 32 reverse
an area of 2.23 square kilometres and is valid from 16 July
circulation surface drillholes and 4,603 underground diamond
2020 to 16 July 2022. Administrative delays to the process
drillholes with an average spacing of approximately 40 metres
of converting the area to a Mining Licence occurred during
x 40 metres, define the Zone III deposit for a combined total
2021 due to the 2022 winter Olympic and Paralympic Games.
An extension to the term of the Retention Licence will be
submitted in 2022 with the relevant authorities.
of 607,959 metres of drilling.
Zone II
Underground
resource definition diamond drilling
commenced in October 2021 and will continue to intensify
throughout 2022. The Indicated and Inferred Zone II
Mineral Resource estimate as announced on 26 January
10
Griffin MininG LiMited GEOLOGY
The local geology comprises of Early Proterozoic granulite
• Near-mine targets, within reach of underground drilling
from existing or planned drives; and
and gneiss with marble lenses, which is unconformably
• Administrative
report
compilations
and
licence
overlain by the Late Jurassic Baiqi Formation and
applications to the relevant Government agencies.
Zhangjiakou Formation. Porphyry sills and dykes intruding
along faults have then cut across the sequence.
Hebei Hua Ao Mining Area
The Caijiaying deposits consist of Zn-Au-Ag-Pb orebodies
hosted in a Paleoproterozoic inlier comprising a mixed sequence
of amphibolite-grade metavolcanic and metasedimentary
rocks intruded by three generations of Jurassic porphyry
dykes and sills. The mineralisation comprises sulphide
lenses of sphalerite with lesser pyrite and minor galena that
favourably replace units within the folded 2.3-billion-year-
old metamorphic basement rocks. The base metal and gold
mineralisation have some similarities with a skarn type of
deposit. Mineralisation lenses are up to 15 metres thick, tend
to dip steeply to moderately to the west, and extend along
strike and down dip tens to hundreds of metres.
EXPLORATION
The strategy of focusing on near-mine exploration and
resource definition drilling has delivered substantial rewards
culminating in the Global Mineral Resource first published
in early 2021 and updated in April 2022 for depletion to
31 December 2021. Exploration drilling activity at the
Caijiaying Mine continues to focus on near mine priority
targets to the east of the main Zone III mine corridor above
the lower 1000mRL mine licence boundary and at Zone II
where there are numerous exploration targets within the
main line of lodes.
Additional Induce Polarization (IP) geophysical anomalies
remain to be tested to the east of Zone II. At Zone V and
VIII the current Retention Licence requires an extension
of its term to enable a new Mining Licence to be granted.
No on ground exploration activity is permitted during this
approvals process.
The Hebei Hua Ao Mining Area covers 3.13 km2 and
includes Zone II and III. The Zone II Mineral Resource
is accessible from the existing Zone III decline and
underground diamond drilling platforms were established
in 2021. Zone II resource definition drilling will continue
to increase defineable extractable resources throughout
2022 while mine production applications and preparations
progress.
At Zone III, the focus has been on aggressive underground
diamond drilling activity to convert Inferred and Indicated
Mineral Resources into Measured and Indicated categories.
A total of 351 underground diamond drill holes were drilled
in 2021 for a total of 37,155 metres utilising 4 underground
electric-hydraulic drill rigs. In 2021, diamond drilling has
focused on resource definition within the mine corridor while
also testing for extensions at depth and to the east of mine
development. Structural and geochemical data collection has
enabled the development of a robust indicator of favourable
host
lithology and proximity to mineralisation. These
lithogeochemical indices developed for Zone III will continue
to be refined and applied in Zone II throughout 2022.
Hebei Hua Ao Retention Licence
The Retention Licence containing Zones V and VIII covers
an area of 2.23 square kilometres and is valid until 16 July
2022. An extension to the term of the Retention Licence
will be sought in 2022. The Company will continue to work
with the relevant authorities to convert the area to a Mining
Licence.
Drill access at Zone II was achieved in October 2021.
Hebei Anglo Area
This significant milestone enabled numerous well defined
As previously reported in 2021 after careful consideration, a
prioritised exploration drill targets to be unlocked and
decision was made to transfer the licence to Griffin’s joint
available for testing. These targets are developed from
venture partner, Yuanrun, to allow its retention under PRC
historical drilling and geophysical surveys combined with
law within the Hebei Hua Ao Group. Should a mining
advanced geochemical and structural modelling techniques.
licence be granted over this area at any point in the future,
Prioritised exploration targets and activities are defined into
this new licence may be contractually transferred back to
the following categories:
•
In-mine areas between or adjacent to known mineral
resources;
Hebei Anglo at the Company’s option. Given the depth of
cover and existing underground infrastructure, the Company
remains in a good position to benefit from any new discovery
should it eventuate.
11
RepoRt and accounts 2021 Caijiaying (contInued)
Shitouhulun and Sangongdi
Proposed 2022 Exploration
Due to the halting of consideration of granting of any
Exploration and resource development at Zone II will
mining tenements in Hebei Province PRC during the
be the primary focus of the Company throughout 2022.
Winter Olympic and Paralympic Games in 2022, work was
At Zone II, diamond drilling will test exploration targets
suspended in obtaining any relevant permits in these areas.
within and adjacent to the resource model and to the east
of the main structural corridor. At Zone III, exploration will
target Inferred Mineral Resources near mine development
to the east of the main lodes.
Plan view of Caijiaying Mine Zones II, III, V & VIII with surrounding licence areas
12
Griffin MininG LiMited OPERATIONS
The safety and welfare of Griffin’s workforce remains an
overwhelming priority of the Company. Underground and
In order to optimise underground stope scheduling, pillar
recovery and economic extraction, the zinc equivalent head
grade was reduced from 6.2% in 2020 to 6.1% in 2021.
surface operations operated safely and consistently in 2021
Zinc and Gold recoveries were broadly maintained in 2021.
without any major incidents. Covid-19 pandemic controls
Lead and silver recoveries declined by 6.4% with lower
continue to be maintained and there have been no outbreaks
head grades.
of Covid-19 at the Caijiaying Mine to date. With assistance
from local PRC authorities, all Hebei Hua Ao and
contractor personnel have received Chinese manufactured
Sinovac and/or Sinopharm Covid-19 vaccinations. As a
result, operations at Caijiaying have not been impacted by
the Covid-19 pandemic.
Accordingly, metal in concentrate production at the
Caijiaying Mine in 2021 may be summarised as follows:
• Zinc metal in concentrate produced 41,587 tonnes
(2020: 32,472 tonnes);
• Gold metal in concentrate produced 14,447 ozs (2020:
A continuing programme of safety and training at the
Caijiaying Mine resulted in an improved “Lost Time
11,250 ozs);
Frequency Rate” for 2021 of 1.2 (2020: 1.28) per one
• Silver metal in concentrate produced 269,570 ozs (2020:
million hours and a “Total Recordable Injury Frequency
292,301 ozs); and
Rate” for 2021 of 3.5 (2020: 4.5) per one million hours.
• Lead metal in concentrate produced 1,069 tonnes (2020:
Production at the Caijiaying Mine in 2021 can be
1,428 tonnes).
summarised as follows:
Following the grant of the mining licence over the Zone
• Ore mined 971,492 tonnes (2020: 854,566 tonnes);
II area, considerable effort has been expended by the
• Ore hauled 979,783 tonnes (2020: 825,412 tonnes);
• Ore processed 985,404 tonnes (2020: 822,058tonnes).
Company’s personnel in working with the Beijing Non
Ferrous Engineering Institute (“ENFI”) on the design and
preparation of documentation for the approval of the Mine
design of Zone II. Development is expected to commence
Whilst mining, hauling and processing rates of the equivalent
in the second half of 2022 once the approval process is
of over one million tonnes of ore per annum at an annualised
concluded.
rate were achieved in the second and third quarters of 2021,
production in the fourth quarter of 2021 was impacted by
the PRC authorities restrictions on the supply of explosives,
and from 1 January 2022, the suspension of explosive supplies
to the Caijiaying Mine due to in the run up, and for, the
Winter Olympic and Paralympic Games in February and
March 2022. Chong Li, some 63 kilometres from the
Caijiaying Mine, was the centre for all outdoor Winter
Olympic events. Mining and processing at the Caijiaying
mine recommenced at the end of March 2022.
Long hole open stoping continues to be the predominant
mining method.
With Tailings Facilities 1 & 2 maximised and fully
rehabilitated, and with Tailings Facility 3 near to capacity,
land has been acquired for, and access constructed to, a
new Tailings Facility 4. Importantly, unlike other tailings
facilities around the world, the Caijiaying Mine produces
“dry tailings” incapable of breaking or causing flooding.
Tailings Dam 4 will be constructed to the highest standards.
The installation and extension of the paste pipe reticulation
system continues in order to increase the amount of waste
material being backfilled into mined out stopes rather
than being sent to the tailings facilities. Backfill includes
cemented paste backfill with secondary stopes filled with
Underground development work was primarily focused on
waste rock material.
developing future stoping horizons between the 1175 mRL
and 1000 mRL levels.
The programme to further modernise and increase safety
at the Caijiaying Mine continued throughout 2021 with the
In 2021, 4,657.3 metres (2020: 4,510.5 metres) of capital
introduction of specific PRC Kuang Anquan (“KA”) (Mine
development and 5,452.8 metres (4,459.3 metres) of
Safety) sealed wet brake vehicles for the transportation of
operational development were completed.
personnel underground. By late August 2021 Hebei Hua Ao
13
RepoRt and accounts 2021 Caijiaying (contInued)
had 10 such vehicles in operation and the contractors at
emissions footprint and negates the necessity of having
the Caijiaying Mine had replaced their vehicles to be KA
manual labour operating the boiler. The Camp now has a
compliant thereby further increasing mine safety, traffic
fully automated modernised heating system.
management and the underground environment.
During 2021 non-compliant
electrical distribution
installations were replaced with PRC “KA” compliant
types.
To further comply with PRC safety requirements, “Double
Control Safety Applications” for digital management of all
safety aspects of the mine were introduced. This application
allows for the storage and real time information flow from
the ‘mine face’ directly to department managers.
Two new remote operated underground loaders were
acquired in 2021 further enhancing Hebei Hua Ao’s remote
operational capability for the safe extraction of ore from
stopes. The main mining contractor at Caijiaying also took
delivery of a new fit for purpose lifting device, a new electric
over hydraulic production drill rig, a new single boom
electric over hydraulic development drill rig and a new
electric over hydraulic ground support installation drill rig.
The haulage contractor also took delivery of three new 20
tonne trucks to replace three 10 tonne trucks in 2021.
In 2021, a new environmentally friendly 40 tonne low
New electronic detonators introduced in 2020 were used
emission boiler was commissioned, used to heat the
for both development and production blasting in 2021.
Caijiaying Mine site processing, administration and other
These are considerably more efficient and effective than the
buildings and the underground workings.
non-electric type detonators previously used.
A new environmentally friendly electrical boiler was
In late September 2021 the first drill platform was constructed
installed at the Caijiaying Mine Camp and commissioned in
to start resource drilling at Zone II with diamond drilling
November 2021. This reduces the Caijiaying Mine’s carbon
into Zone II commencing in early October.
KA compliant underground vehicles at the Caijiaying Mine Site
14
Griffin MininG LiMited New Camp Electric Boiler
15
RepoRt and accounts 2021 16
Griffin MininG LiMited 17
RepoRt and accounts 2021 sustainability, environment and loCal Community
SUSTAINABLE DEVELOPMENT POLICY
Sustainability, safety and occupational health as well as care for the environment are central to Griffin’s values. Griffin endeavours
to achieve economic, social and environmental benefits to its stakeholders with environmentally friendly (“green”) operations,
circular and low-carbon operations whilst striving to realise high-quality sustainable development, respecting human rights, and
actively engaging in communication and exchanges with stakeholders.
STAKEHOLDER COMMUNICATION
Griffin believes that establishing a strong and trustworthy relationship with its stakeholders is essential to the Group’s sustainable
development. Actively understanding and responding to the needs of stakeholders is the cornerstone of Griffin’s sustainable
development management. The Company and its subsidiaries regularly communicate with their stakeholders to understand their
concerns and act accordingly.
Stakeholders
Key Issues
Communication
Government and regulatory agencies
Compliance with laws, regulations
and policies
Corporate governance
Cooperation with government agencies
(See separate corporate governance
report pages 34 & 35)
Safety and environmental protection
Daily communication and reporting
Shareholders and investors
Sustainable development governance
Human rights policy disclosure
Regular reporting (see corporate
governance report pages 34 & 35)
Anti-slavery policy, equal opportunities
employer
Anti-corruption
Bribery and corruption policy
Employees and their families
Salary and benefits
Employee performance interviews
Training and development
Staff representative conference
Health and safety
Regular safety reporting, safety
meetings and safety inductions
Suppliers/contractors
Customer service
Dedicated procurement department
Product quality
Independent assay and moisture checks
of concentrate sold
Community
Community investment
Involvement in local community
Community benefits
Local community support, including
infrastructure, poverty alleviation,
schooling
Environmental protection and
ecology
Care and protection of local
environment with minimal discharges
18
Griffin MininG LiMited SUSTAINABLE DEVELOPMENT
ACTIONS
Griffin has proactively responded to the Sustainable
Development Goals (“SDGs”) set by the United Nations.
Nine SDG priorities have been identified that have the
most relevance to the Group based on Griffin’s business
characteristics and as a result Griffin has committed to
supporting and implementing the SDGs in its corporate
development strategy and business operations to achieve a
“win-win” of business and social value.
Key Goals
Actions
Corresponding Chapters
Participation in community investment, implement rural revitalisation
strategy, support for the development of special agriculture in
underdeveloped areas, and help in improving the living standards of
people
Care for physical and mental safety of employees, ensuring employees’
health and safety during the Covid-19 epidemic, constantly improving
the social security and the salary and welfare system to enhance the
happiness of employees.
Community Relations and Social
Investment , page 30
Protection of Employees’ Rights,
page 27
Promotion of water-saving with the strengthening of water usage
management, support for a water-saving society, and elimination of
water resources wastage.
Environmental Management
Improvement, page 20
Adherence to the people-oriented talent concept. Griffin has established
a sound talent management and training mechanism, created an
inclusive and harmonious working environment, and effectively
protected the legitimate rights and interests of employees.
Protection of Employees’ Rights,
page 27
Prohibition of forced labour, child labour, and any form of discrimination
such as gender, region, religious belief, or nationality, and adhere to
the principle of equal employment to provide equal opportunities to
employees.
Ensuring safe production, continuous improvement of the utilisation
of mineral resources, vigorous development of a circular economy,
strengthening of supplier management, and building a sustainable value
chain.
implementing energy
to climate change,
Actively responding
conservation and emission reduction measures, improving energy use
efficiency, strengthening green mine construction, and promotion of
low-carbon development.
Protection of Employees’ Rights,
page 27
Safety Management System Set
Up, page 25
Supplier Management page 29
Customers and Products
Responsibilities, page 29
Environmental Responsibility,
page 20
“Zero Wastewater Discharge”, with the recycling of all production
wastewater, resulting in the treatment and utilisation of 100% of
mining waste water.
Environmental Responsibility,
page 20
The establishment of compliance management and reporting systems
to monitor the integrity and compliance of regulations and business
code, to ensure zero tolerance of corruption and any illegal acts against
business ethics.
Anti-corruption Management,
page 30
19
RepoRt and accounts 2021 sustainability, envirOnment and lOCal COmmunity (contInued)
ENVIRONMENTAL RESPONSIBILITY
vegetation to international standards and in compliance
As a responsible corporate citizen, Griffin not only
with PRC environmental regulations;
abides by local regulatory requirements but seeks to
• Funding the state endorsed China “greening” project
apply best worldwide practices regarding the protection
including the planting of trees by local villagers in the
of the environment. Hebei Hua Ao strictly abides by the
Caijiaying Mine area;
Environmental Protection Law of the People’s Republic of
China, the Environmental Impact Assessment Law of the
People’s Republic of China and the Cleaner Production
• China “green mine” certification with the number 1
ranking in Hebei Province;
Promotion Law of the People’s Republic of China and
• Approval from the relevant authorities to increase the
other relevant laws and regulations. In doing so, Griffin
capacity of the dry tailing’s storage facility without
is committed to conserving resources and protecting the
an increase in the footprint of the facility via modern
environment by reducing the impact of operations on the
design practices and with a new tailings facility being
environment and natural resources.
Griffin conducts its operational activities in strict accordance
with the requirements of laws and regulations with the
constructed in 2022. Crucially, these facilities are “dry”
compared to those that are “wet” which have failed
elsewhere in the world;
establishment of
internal environmental monitoring
• Recycling of dry tailings by transportation to a local
systems and the use of professional testing agencies to
strictly monitor air emissions, wastewater, solid waste
discharge to enable the timely resolution of any issues that
might be encountered.
Griffin continues to improve related management systems
and technical standards for energy management, improve
resource utilisation rates and maximise the efficiency of
resources and energy consumption. Such practices include:
brickwork for use as base material in brick manufacturing;
• A dedicated waste collection building to accumulate
Caijiaying Mine waste prior to sorting, collection and
recycling;
• The planting of landscape trees outside the main gate
and some 30,000 elm trees and 3,000m² of grass planting
around the Caijiaying Mine as part of local Chinese
Environmental Protection Agency greening project;
• Controls to prevent the discharge of waste into the
• Planting of Mongolian scotch pine trees over an
environment;
area of 3,869m² to suppress dust and prevent surface
• Sewage treatment plants at the Caijiaying Mine and
degradation.
Camp sites to deal with all effluent produced;
• The construction of a new hazardous waste storage
• All water from the Caijiaying Mine and Camp
facility;
accommodation being recycled;
• Boiler flue gases being treated by a dust and sulphur
extraction system to prevent the emission of pollutants
into the atmosphere being enhanced with a new 40
tonne low emission boiler at the Caijiaying Mine and
electric boiler at the Camp;
• Waste rock and mill tailings used for backfilling
underground stope voids. This minimises the mine
footprint by reducing the need for larger tailings and
waste storage facilities;
• Noise, dust and blasting vibration from operations
being strictly controlled;
•
Installation of drainage trenches around the ROM pad,
waste dump and main access gate area to ensure effective
water run-off and protection against soil erosion;
• Timely renewal of environmental permits including
water usage permits, radioactive source safety permits
and waste discharge permits;
•
Installation of a Total Suspended Particles online
monitoring system continually monitored by the
Municipal Environmental Protection Authority
Information Centre;
• Heavy Metal on-line monitoring equipment replaced
by more modern systems and monitored on-line by
• Decommissioning and rehabilitation of Tailings Dams
the Municipal Environmental Protection Authority
1 & 2. This work included battering the waste dump
Information Centre;
slope, backfilling, topsoil sheeting and planting of
20
Griffin MininG LiMited •
Installation of additional fencing and dust cannons on
national standard “Comprehensive Discharge Standard of
the ROM pad to further control dust and any heavy
Air Pollutants” (GB162967-1996).
metal emissions;
In 2021, Hebei Hua Ao removed the existing coal-fired boiler
• Upgraded dust collection system in the screening house
and hot air furnace at the Caijiaying Mine in accordance
with new dust collectors effectively reducing fine ore
with the national PRC environmental protection policy and
loss and dust discharge;
• The completion and acceptance of clean production
targets with the targeted reduction in heavy metals
confirmed;
installed a low-emission coal-fired boiler to be used in 2022
after formal acceptance. The new coal-fired boiler adopts
technologies such as wet type dust collection, sodium alkali
and denitrification, which can treat pollutants such as
smoke, sulphur dioxide and nitric oxide in accordance with
• Mist cannon and vacuum trucks for dust suppression;
national and local emission standards.
• The blending of semi-coke coal with common coal for
use in boilers to reduce the discharge of smoke, sulphur
In 2021, the Company achieved full compliance with the
emission standards for both “organised” and “unorganised”
dioxide and nitric oxide;
exhaust gases.
• Greening of site and camp accommodation areas
including vegetable gardens and flower beds; and
• Ground hardening of main passageways around the
Caijiaying surface facilities to suppress dust.
WASTE GAS TREATMENT
Griffin strictly abides by China’s air emissions standards and
strictly controls air pollutants such as sulphur dioxide and
nitrogen oxides generated during mining and processing
by installing waste gas treatment devices to ensure that air
pollutant emissions meet relevant standards. The smoke and
WASTEWATER TREATMENT
Wastewater at Caijiaying is mainly domestic sewage,
production wastewater and drain water from the Mine.
After treatment, sewage and plant wastewater is reused for
production, with mine drain water clarified at the mine
water purification station and then sent by pressurised
pump to the high-level water tank for use in mill operations.
In 2021, the Company continued to achieve full recycling of
all production wastewater, sewage and mining waste water.
WASTE STORAGE AND DISPOSAL
dust generated by heating boilers and hot blast stoves are
Non-hazardous waste produced consists primarily of waste
efficiently treated by a series of desulphurisation and dust
rock and tailings. All waste rock produced is backfilled to
removal equipment such as bag filters to ensure that the
the underground open stopes resulting in 100% utilisation
pollutant emission concentration in the exhausted gas meets
of mined waste rock. Part of the tailings generated is used
the requirements of China’s “Boiler Air Pollutant Emission
for underground paste fill whilst the remainder is used for
Standard” (GB13271-2014). The main dust generating areas
making bricks or stored in the tailings facility. This results
such as crushing and screening at the mill are equipped with
in total utilisation and safe disposal of all wastes.
a sealed cover and bag filters with a dust removal efficiency
of 98.65%. The resulting emissions meets the requirements
of China’s national standard “Pollutant Emission Standard
of Lead and Zinc Industry “ (GB25466-2010 ).
The Company strictly abides by China’s national standard
“Hazardous Waste Storage Pollution Control Standard
(GB18579-2001)” and has formulated internal documents
such as “Hazardous Waste Temporary Storage Management”,
In addition, dust removal devices are set up in Hebei
“Hazardous Waste Ledger Management” and “Hazardous
Hua Ao’s workshops. Areas affected by uncontained dust
Waste Incident Report”. All hazardous waste generated is
emissions are controlled by setting up dust nets, spraying
disposed of by a qualified third party. In accordance with the
water and regular cleaning. Multiple total suspended
PRC government’s environmental protection requirements,
particulate matter online monitors have been installed
Hebei Hua Ao has installed an online monitoring system
in the mining area to ensure that the total suspended
for hazardous waste transfer and connected it directly to the
particulate matter and the concentration of unorganised
National Environmental Protection System to prevent illegal
particulate emissions meet the requirements of China’s
disposal of hazardous waste.
21
RepoRt and accounts 2021 sustainability, envirOnment and lOCal COmmunity (contInued)
RESOURCE USAGE
Griffin
strictly
abides by
the PRC’s
rules on
Energy
Conservation
and
other
laws
and
regulations. The Company
seeks
to continuously
promote resource conservation by introducing energy-
saving equipment, eliminating high-energy consumption
equipment, optimising mining methods and processing
This includes the containment of rock crushers, ball
mill, fan and other high-noise equipment to minimise
noise pollution as much as possible. Noise monitoring
stations have also been installed to comply with the PRC
Environmental Noise Emission Standards for Industrial
Boundaries (GB 12348-2008).
technology to minimise resource use and create long term
CLIMATE CHANGE
sustainable operations.
An energy conservation and emission reduction work
team has been established at the Caijiaying Mine to make
relevant assessments and promote energy conservation.
Consequently, a resource utilisation assessment system has
been created to set energy consumption targets for each
workshop and team, incorporating the related KPIs into
the annual assessment, all with the aim of enhancing the
assessment of their energy-saving work and cultivating
employees’ awareness of
responsibility
for energy
conservation and environmental protection. In this regard,
a number of measures have been undertaken to improve
energy efficiency and raise personnel awareness including;
the use of LED energy-saving lamps to replace traditional
lamps; installing inverter air compressors to further reduce
the consumption of energy and resource in the production
process; and placing “Turn Off Lights” signs to encourage
employees to turn off their electronic devices when they
Griffin studies the possible impact of climate change on
business operations and actively tackles climate change
where it is able to. This has involved identifying risks
related to climate change such as extreme weather and
sudden natural disasters including rainstorms, snowstorms,
typhoons, etc. that may lead to power supply interruptions
and production accidents, causing significant economic
losses and threatening personal safety. Accordingly, Griffin
has developed relevant measures to address these risks
including back-up diesel generators and ensuring sufficient
supplies of essential goods. In 2021, the Company upgraded
the emergency power generation facility from 3,200KW
to 4,000KW. The upgraded facilities can ensure the
continued operation of underground ventilation, drainage
and mill maintenance work in case of an emergency, thereby
reducing the risk of underground workers being trapped
due to power outages.
leave areas.
ENVIRONMENTAL EMERGENCY
Griffin recognises that water shortage is a serious world
RESPONSE PLAN
issue and whilst the Caijiaying area does not suffer
Griffin recognises the impact of unexpected environmental
significant water shortages, the Company has formulated a
emergencies on operations and safety. Hebei Hua Ao
“Water Conservation Management System” to record water
complies with the Regulations on Safety Management of
consumption in all parts of the Caijiaying Mine operations
Hazardous Chemicals, the Regulations on the Management
on a real time basis to avoid wasting water resources. Griffin
of Chemicals Prone to Producing Narcotic Drugs,
advocates water conservation and the awareness of water-
the Measures for the Public Security Management of
saving amongst employees. All water-using equipment
Hazardous Chemicals Prone to Producing Explosives and
such as reservoirs, faucets, and water pipes are regularly
other relevant laws and regulations and uses special storage
monitored to prevent the water leakage.
NOISE MANAGEMENT
Noise generated underground from the use of explosives
and machinery has minimal impact at ground level and
underground workers are required to wear ear protectors.
To control noise generated from the operation of machinery
and equipment on the surface, Griffin strictly abides by
the PRC’s Prevention and Control of Environmental
Noise Pollution and other relevant laws and regulations.
facilities for hazardous chemicals. To prevent emergency
environmental accidents, environmental risk assessments
are regularly carried out and the Company, has developed
a “One Plant, One Policy Implementation Plan” for
Emergency Response to Heavy Pollution Weather and
Environmental Emergencies, set up a specialised emergency
leading group to ensure emergency plans can be effected
and taken effective measures for rescue and reduction of
pollution losses and ecological damage.
22
Griffin MininG LiMited Bricks manufactured from recyled tailings from the Caijiaying Mine
23
RepoRt and accounts 2021 sustainability, envirOnment and lOCal COmmunity (contInued)
Hebei Hua Ao regularly conducts emergency drills. In 2021
Griffin emphasises environmental monitoring in mining
emergency drills were undertaken for waste mineral oil
areas and has established a geological disaster monitoring
leakage emergencies.
HAZARDOUS CHEMICALS
MANAGEMENT
Griffin complies with the “Regulations on the Safety
Management of Hazardous Chemicals”, “Regulations on the
Management of Precursor Chemicals”, “Measures for the
Public Security Management of Precursor Explosive Hazardous
Chemicals” and other relevant laws and regulations and
realises professional management of hazardous chemicals
through dedicated storage facilities for hazardous chemicals.
GREEN MINE CONSTRUCTION
In 2020, Griffin actively enhanced its green mine operation
and compiled the “Green Mine Self-Assessment Report”
and “Green Mine Building Implementation Plan”. In doing
so it successfully passed the national green mine review in
China and was listed in the PRC National Green Mines list
published by the National Ministry of Land and Resources.
As one of the PRC National Green Mines, Griffin proactively
implements the national decision and deployment on Green
Mining Development and Green Mine Construction,
adheres to the policy of “Development in Protection
and Protection in Development” and strengthens the
construction of green mines. Griffin is committed to
environmental protection and sustainable development in
the lifecycle of mining exploration, mining, processing,
closure and rehabilitation.
Griffin has formulated the Mine Geological Environmental
Protection System and established a green mine construction
team headed by the Caijiaying General Manager, with the
relevant sub-leaders as deputy leaders and all production
departments as team members. In 2021, Griffin played an
active role in a leading group for green mine construction,
established sound corporate management mechanisms and
safety regulations, strictly implemented the requirements
of relevant systems, and carried out
improvement
in the areas of operation in accordance with the law,
standardized management, environmental protection and
safety production by strengthening compliance emission
management, optimizing the use of mineral resources,
upgrading greening investment and establishing cooperation
between enterprises and local communities.
system. Griffin is committed to identifying potential disaster
hazards on time by strengthening the management of the
geological environment in mining areas and measuring the
implementation of environmental standards and the progress
of environmental protection work. Griffin has formulated
the Green Mine Construction Plan, with the aim of investing
5%-10% of the total enterprise output value in “Mine
Environmental Protection and Treatment Funds” from
2019 to 2023 by way of green mine construction projects
such as the construction of covered ROM pad, tailings
reclamation and boiler renovation. Tailings reclamation and
boiler renovation projects have all now been completed.
Whilst the covering of the ROM pad cannot be completed
due to geological and foundation constraints, Hebei Hua
Ao has taken measures such as erecting dust control nets,
spraying chemicals, and sprinkling water to suppress dust
to achieve the same treatment effect as the construction of
a covering. In addition, Hebei Hua Ao is greening exposed
land in the mining area to achieve the goal of “As Green as
Possible”.
In the future, Griffin will continue to strengthen ecological
and environmental management, encourage employees
to improve the level of development and utilisation, and
promote the effective construction of green mines.
TAILING FACILITIES CLOSURE
Hebei Hua Ao has completed the closure and rehabilitation
of the Tailings Facilities 1 and 2. Both tailing facilities’
closures and rehabilitation included a number of complex
works such as a reservoir area treatment, slope greening,
and a safety facilities set-up, with a total investment of more
than $14.2 million.
ENVIRONMENTAL RECOGNITION
Griffin’s environmental best practices have been recognised
in the past by Chinese Government authorities with Hebei
Hua Ao being presented with the National Environmental
Award and the Mine Development Outstanding Achievement
Award at successive China Mining Conferences.
24
Griffin MininG LiMited Environmental Key Performance Indicators - Emissions:
Indicator
Total GHG emissions (Scope 1 and Scope 2) (tonnes)
Direct GHG emissions (Scope 1) (tonnes) including: Diesel
Indirect GHG emissions (Scope 2) (tonnes) including: Purchased electricity
Wastewater discharge (10,000 tonnes)
Wastewater discharge intensity (tonnes/RMB million)
Hazardous waste safely disposed of (tonnes)
General solid waste generation (10,000 tonnes)
Notes:
2021
42,644.31
1,166.88
41,477.43
0
0
47.60
68.83
The greenhouse gas (GHG) inventory includes carbon dioxide, methane, and nitrous oxide. GHG emissions are presented in carbon dioxide
equivalents and calculated based on the electricity emission factor in the 2019 Baseline Emission Factors for Regional Power Grids in China
issued by the Ministry of Ecology and Environment of the People’s Republic of China and the 2006 IPCC Guidelines for National Greenhouse
Gas Inventories (2019 Revision) issued by the Intergovernmental Panel on Climate Change (IPCC). Scope 1 GHG covers GHG emissions
directly generated from the businesses owned or controlled by the Company; Scope 2 GHG covers “indirect energy” GHG emissions from the
Company’s internal consumption (purchased or obtained).
Nitric oxide, sulphur dioxide and smoke mainly emanate from heating boilers. During the reporting period, Hebei Hua Ao has removed the
original heating boiler and hot air furnace. The new low-emission coal-fired boiler, which has not yet been put into use, does not emit nitric
oxide, sulphur dioxide and smoke emissions.
Hazardous waste includes water mineral oil and waste oil drums.
General solid waste is mainly from tailings.
Waste water is recycled.
Environmental Key Performance Indicators - Energy and Resources Consumption:
Indicator
Total energy consumption (MWh)
Direct energy consumption (MWh) including: Diesel
Indirect energy consumption (MWh) including: Purchased electricity
Total water consumption (10,000 tonnes)
Notes:
2021
58,263.004
0.004
58,263.00
40.90
Total energy consumption is calculated based on direct and indirect energy consumption according to the conversion factors listed in the National
Standards of the People’s Republic of China General Principles for Calculation of the Comprehensive Energy Consumption (GB/T 2589-
2020).
During the reporting period, Hebei Hua Ao has removed the original heating boiler and hot air furnace. A new low-emission coal-fired boiler
has been installed but has yet to be put into use.
The Company’s business does not involve the use of packaging materials and data disclosure.
SAFETY MANAGEMENT
As mining is inherently dangerous, Hebei Hua Ao strictly
and the OHS Department, which is responsible for the work
complies with laws and regulations of the PRC such as the
related to the safety production management, and through
Law of the PRC on Work Safety and the Law of the PRC on
the establishment of the “Safety Production Responsibility
Safety in Mines, implements the “Safety and Prevention First,
System” and “Double Prevention System
for Safety
Comprehensive Governance” work safety policy, provides a
Production” from those in charge to the operators. Hebei Hua
safe working environment for employees, and continuously
Ao clarifies the safety responsibilities of each point, so that the
carries out safety management system development. Hebei
safety responsibilities run through all aspects of production
Hua Ao set up the Safety Production Management Committee
and operation.
25
RepoRt and accounts 2021 sustainability, envirOnment and lOCal COmmunity (contInued)
In 2021, Griffin continued to improve safety management
Safety Training and Emergency Drill
systems and established a total of more than 80 production
safety rules and regulations and more than 150 safety
operation procedures to standardise the safe operation
of operators. Hebei Hua Ao effectively ensures safe and
compliant production by strengthening various forms of
safety management. For higher risk jobs, Griffin requires
employees to conduct a Job Safety Analysis (JSA) before
starting work to ensure that safety hazard inspections are
completed, and potential risks are identified beforehand.
Hebei Hua Ao conducts safety inspections regularly to
To enhance employees’ awareness of safety protection, the
Company formulates annual safety education and training
plans and invites experts to regularly train employees
contractors on occupational health, first aid and safety
operations. Employees are equipped with protection devices
and personal protective equipment (PPE) in accordance
with the requirements of PRC laws and regulations.
Through regular emergency drills for flood control in tailing
ponds and anti-snatching accidents and firefighting drills,
employees improve self-rescue and self-help capabilities to
ensure production activities are safe and compliant, and to
be ready for tackling emergencies.
reduce the number of safety accidents. In 2021, Hebei Hua
Ao conducted 4 quarterly safety inspections, carried out a
In 2021, the Company conducted safety training as follows:
total of 176 safety inspections in areas such as processing,
Training Type
Number of Participants
(Person-time)
mining workshops, bases, and warehouses, and organised a
total of 62 special safety inspections. Relying on a meticulous
safety management system, the incident rate of all types of
accidents decreased significantly. The total frequency of
Annual safety training for all employees
Occupational health training
recordable injury accidents per million working hours in
On-site first aid training
2021 was 3.5, which was 14.3% lower than the result in
Emergency rescue team training
2020.
In 2021 there were no work-related fatalities.
New employee’s safety induction
Daily safety training
750
157
173
83
384
2,135
Health and Safety of Employees
Indicators
2021
2020
2019
Total number of
work-related fatalities
0
0
0
Lost days due to work injury
180
570
720
Emergency Plan for Accidents
To
implement
safety management policies, Griffin
constantly improves work health and safety guidelines. In
accordance with the requirements of relevant PRC laws and
regulations such as Workplace Accident Emergency Plan
Management Measures and Enterprises Workplace Accident
Emergency Plan Preparation Code (GB/T 29639-2020),
combined with risk identification and assessment, Hebei
Hua Ao established a Comprehensive Emergency Plan for
Production Safety Accidents and a Special Emergency Plan
for Tailings Dam, Underground and Processing Plant to
strengthen accident emergency management. The purpose
is to ensure emergency rescue can be carried out timely and
effectively to minimise accident damage, protect employees’
safety and reduce property loss.
The total safety training hours in 2021 was 8,247hrs.
Contractors Safety Management
Hebei Hua focuses on improving the safety management
level of contractors, based on management measures
such as the Non-coal Mine Outsourcing Projects Safety
Management Interim Measure and Enhance Metal and
the Non-metal UG Mine Outsourcing Project Safety
Management Regulations, formulating a safety management
and assessment system for contractors into the Company’s
safety management system.
Hebei Hua Ao has signed a Safety Production Management
Agreement with contractors to clarify the management
responsibilities of both parties for accident potential hazard
investigation, management, prevention, and control.
Regular safety meetings are arranged to improve the safety
awareness of contractors. For contractor safety management
assessment, the OHS Department of Hebei Hua Ao and
the contractor’s competent department jointly set up an
assessment team to review the management structure, the
implementation of laws and regulations, and safety training
of contractors. Moreover, random checks are conducted
on the contractors’ “Non-Coal Mining Enterprise Safety
26
Griffin MininG LiMited
Production License” and other relevant certifications to
equal opportunities for career development and to build a
ensure their employees are qualified.
harmonious labour relationship. Hebei Hua Ao implements
EMPLOYEES’ RIGHTS
Hebei Hua Ao values its employees by adhering to “Talents
are the First Resource” policy. This insists on a people-
oriented principle and the protection of employees’ basic
rights and interests as well as mutual development between
an 8-hour working day system in accordance with PRC law
and stipulates that the average working hours of employees
should not exceed 40 hours per week. Due to the nature
of some activities, a special working hours system may be
implemented after obtaining approval from the relevant
departments.
employees and the Company. This is an important part of
Griffin offers competitive salary and welfare benefits to its
Griffin’s overall sustainable development by continuing to
employees according to the nature of the job. An employee
optimise employee talents, improve the overall quality of
whose work exceeds regular working hours will be offered
employees and committing to building a professional and
additional compensation or compensatory leave. Hebei
ethical team with a high sense of responsibility.
Hua Ao implements a system of 20 days of continuous work
EMPLOYEE MANAGEMENT POLICY
Griffin is an equal opportunities employer and Hebei Hua
Ao strictly complies with the Labour Law of the PRC, the
Labour Contract Law of the PRC, the Law of the PRC
on the Protection of Women’s and Children’s Rights and
other relevant laws and regulations. Griffin has established
a number of employee management systems and procedures
to protect the legitimate rights and interests of employees,
including recruitment and dismissal, compensation and
promotion, working hours, holidays, equal opportunities,
and 10 days of continuous leave. Hebei Hua Ao reimburses
travel expenses between the Caijiaying Mine and the
employees’ home.
Griffin advocates a diverse workforce and does not
discriminate on the grounds of gender, age, nationality,
race, religious beliefs, and physical condition in either
recruitment, training, selection, salary and promotion.
Griffin is against any forms of slavery, forced labour or child
labour and will not deal with any party which it believes
engages in such practices.
diversification and other employee benefits.
In 2021 there were no reported violations involving child
Griffin has contracts with employees in accordance with all
laws and regulations to ensure that all employees are given
or forced labour and there were no major labour disputes
within the Griffin Group. Further, no Griffin Group
company received any complaints on human rights issues.
Category
Employee basic information
Number of employees
Proportion
Number of employees in Hebei Hua Ao
New employees in 2021
By gender
By management level
By employee type
By region
Male
Female
Management Personnel
General Personnel
Full-Time
Part-Time
Domestic
Overseas
443
32
379
64
20
423
443
0
439
4
100%
7.2%
85.6%
14.4%
4.5%
95.5%
100%
0%
99.1%
0.9%
27
RepoRt and accounts 2021 sustainability, envirOnment and lOCal COmmunity (contInued)
HEALTH AND SAFETY OF EMPLOYEES
environment for employees. Hebei Hua Ao strictly
The health and safety of the Group’s employees is of
paramount importance. All Group companies abide by
the relevant laws and regulations of their country of
incorporation and operation, including the Law on the
Prevention and Control of Occupational Diseases of the
PRC and the Measures for Supervision and Administration
of Employer’s Occupational Health Surveillance. In
particular, Hebei Hua Ao has established a sound and
safe production management system and improved the
emergency plans for production safety accidents to reduce
the risks of occupational hazards.
As of 31 December 2021, Hebei Hua Ao had a total of 443
employees. The employee composition is shown on page 27.
OCCUPATIONAL HEALTH DISEASES
COVID-19 CONTROL AND PREVENTION
abides by the laws and regulations of the PRC such
as the Law of the PRC on Prevention and Control of
Occupational Diseases and the Measures for Supervision
and Administration of Employer’s Occupational Health
Surveillance, hires qualified third-parties to actively identify
occupational disease hazards and carry out regular testing
of occupational hazard factors. Medical insurance and
supplemental medical insurance is provided for employees.
Pre-employment, on-the-job and post-employment health
checkups are undertaken.
With the Covid-19 pandemic ongoing, Hebei Hua Ao
strictly implements the epidemic prevention requirements
of the PRC national and local governments, temperature
checks everyone before entry to the Caijiaying Mine,
regularly ventilates and disinfects the office premises,
carries out personnel health checks, and strictly checks the
health condition of visitors entering and leaving Company
Hebei Hua Ao continues to strengthen procedures and
premises, so as to protect the health and safety of employees.
controls for the prevention and control of occupational
diseases,
improve the occupational health protection
equipment and facilities, and the production and working
Wherever possible, Griffin Group employees were
encouraged to work from home in compliance with local
regulatory requirements.
Covid-19 Vaccination Centre at the Caijiaying Mine
28
Griffin MininG LiMited CAREER DEVELOPMENT AND
TRAINING OF EMPLOYEES
Griffin values the training and development of all employees.
It has formulated promotion channels and flexible employee
training systems to support employees’ career development
and improve employees’ capabilities.
Training conducted in 2021 included:
Hebei Hua Ao evaluates and assesses the performance of
suppliers by carrying out various field inspections, quality
tracking and testing analysis on supplier operations,
reputation, product quality, production capacity, delivery
capacity, transportation capacity, etc. Suppliers performance
is monitored to understand and keep track of the risks they
may be involved in. Suppliers with unqualified product
quality, frequent untimely deliveries, and who fail to provide
on-time and high-quality after-sales service, are blacklisted
• 25 management personnel received safe production
for three years.
knowledge and management ability training.
• 27 operators received training on getting special
equipment operation certificates.
CUSTOMERS AND PRODUCT
RESPONSIBILITY
• 20 operators and management personnel received
special equipment management and operation training.
Quality Control
• 32 new employees received three-tier training.
• All employees received safety training.
SUPPLIER MANAGEMENT
With strict production management and quality control,
every effort is made to ensure the production of high quality
zinc and lead concentrates that satisfy customers’ needs. The
extraction of all lead from the zinc concentrate produces a
separate lead concentrate containing precious metals and
Suppliers are an important cornerstone of sustainable
ensures that a highly desirable lead free zinc concentrate is
development. To ensure that supplier activities comply
produced.
with the requirements of local regulatory authorities and
our selection criteria, a supplier management system has
been established that strictly controls the entire process of
supplier access, evaluation and subsequent management.
When establishing procurement contracts for equipment,
building materials, steel, chemicals and other products,
Griffin sets clear environmental and safety management
requirements for suppliers, stipulating that they must
strictly comply with national and local environmental and
safety laws and regulations in production and operating
The following measures are undertaken in the efficient
production of good quality concentrate:
• Strict maintenance plans to ensure that equipment is
always in good and reliable condition;
• Ongoing
improvements to the flotation process,
including optimisation of system controls, enhancement
of process stability resulting in better recovery of zinc,
lead, gold and silver;
activities. Product packaging must be solid and clearly
• PLC control systems to further ensure the stability of
marked. The supplied goods must be safe and neatly
processing operations;
packaged and delivered to the designated place safely. In
addition, a commitment letter on “Illegal Employment of
Employees” from the suppliers is requested, requiring them
to strictly comply with the Constitution of the PRC, the
• Ongoing technical training to employees to improve
their capabilities and their ability to deal promptly and
safely with all emergencies;
Employment Contract Law of the PRC, the Law of the
• Samples taken every two hours during processing to
PRC on the Protection of Minors and the Provisions on
correct variances and ensure the stability of processing;
Prohibition of Using Child Labour. Griffin prohibits the
and
employment of child labour and late salary payment to their
employees so as to prevent social and environmental risks
within the supply chain.
• A combination of internal and external inspections for
assay analysis to ensure the accuracy of all assay data.
29
RepoRt and accounts 2021 sustainability, envirOnment and lOCal COmmunity (contInued)
Protection of Rights and Interests of Customers
COMMUNITY RELATIONS AND SOCIAL
Griffin takes a responsible and proactive approach to building
INVESTMENT
long-term, harmonious and stable customer relationships
Griffin, through Hebei Hua Ao, has invested heavily in the
and endeavours to resolve all customer claims promptly. In
local communities. This includes working with the local
2021, Hebei Hua Ao did not receive any complaints or have
communities towards eliminating poverty and improving
any returns regarding concentrate quality nor did it recall
people’s livelihoods. Griffin believes that enterprise and
any concentrate sold due to safety or health issues.
community development are closely related, combining
ANTI-CORRUPTION MANAGEMENT
Griffin insists on transparent operation, with systems
to fully implement anti-corruption management whilst
respecting cultural norms. Hebei Hua Ao strictly abides by
the Law of the PRC Against Unfair Competition, the Law
of the PRC on Anti-money Laundering and relevant laws
and regulations, has zero tolerance for any form of illegal
behaviours including bribery, extortion, fraud, and money
laundering, and prohibits directors and employees from
engaging in illegal or unethical economic activities.
corporate strengths with community needs. Griffin actively
carries out community
improvements, supports
local
institutions and provides charitable support where needed.
By establishing a “Community Development Plan” and other
support, Griffin has formulated community development
plans in areas such as poverty alleviation, education, medical
care, rural revitalisation, industrial support, infrastructure
construction, disaster relief and traditional culture support.
These are considered and implemented as a way to promote
harmonious economic and social development and to be an
excellent corporate citizen of the PRC.
Griffin has carried out the following work to enhance anti-
Poverty Alleviation
corruption management, including:
• Formulating anti-corruption policies and code of
conduct for employees to monitor business operations
and business activities of employees and third-party
contractors.;
• The employment behaviour code of conduct is reviewed
and updated each year by Hebei Hua Ao’s Human
Resources (“HR”) department head and the Caijiaying
Mine’s Operation Manager to ensure all disciplinary
actions are up-to-date and appropriate for any possible
risks to the business including anti-bribery and anti-
corruption;
• Griffin encourages employees to report anonymously or
through established reporting channels any suspicious
misdeeds. Information provided by the whistleblower
and their identity is kept confidential to protect the
personal safety of the whistleblower;
• Griffin
regularly
reinforces
supervision
and
management, and regularly reviews the reporting
procedures for anti-corruption and anti-fraud.;
• Griffin continuously promotes the work of building a
culture of integrity and employees’ anti-corruption
awareness through regular training.
In order to assist and implement the decisions and directives
of the Chinese government to reduce poverty, in accordance
with the requirements of the Leading Group of Poverty
Alleviation in Hebei Province, Griffin has implemented
a poverty alleviation plan in conjunction with the local
community. This includes pensions and other financial
support as well as non-financial donations to local people.
In 2021, Hebei Hua Ao signed assistance agreements to help
villages in Zhangjiakou City, Hebei Province, including
No.3 Township, Qigangou Village, Sangongdi Village
and Xingshengmao Village. 1,000 bags of white flour were
donated to local villagers, and 950 bags of white flour and
600 bags of rice for Xiaobazi Administrative Village to help
families in need. 2,675 kilograms of potatoes were purchased
from villagers to help increase their incomes and boost local
economic development by purchasing agricultural products.
Education
Since the commencement of operations at the Caijiaying
Mine, Hebei Hua Ao has been providing financial support
to the only elementary school in No.3 Township, Zhangbei
County, Zhangjiakou City, Hebei Province. This includes
the establishment of the “Hebei Hua Ao Hope Scholarship”
to encourage local high school graduates to enter university.
The “Hua Ao Hope Scholarship” was established with
an annual investment of Rmb 100,000, and is specifically
30
Griffin MininG LiMited
implemented and managed by the Zhangbei County
With years of regular practice Hebei Hua Ao has established
Hope Project Leading Group. By 31 December 2021 a
and formed a set of emergency rescue rapid response
total of Rmb1,020,290 (US$160,00) had been invested in
processes. The emergency rescue team is not only able to
educational support in the local area.
respond to all kinds of emergencies in the mine, but also
Community Investment
Community communication is seen as an effective way
to build trust with local community people and achieve
harmony and co-prosperity between Griffin and the
community. As well as poverty alleviation and support for
local cultural events this has included:
• The construction and maintenance of a new water bore
and water supply;
• The construction and maintenance of a sealed road
from San Hao township to the Caijiaying Mine area;
enable it to participate in community emergency rescue.
In 2021, the emergency response team participated in
two community fire-fighting operations to protect the
lives and property of villagers. In addition, Hebei Hua Ao
invested Rmb950,000 in the maintenance of rural roads
around mining areas to help build public transportation and
infrastructure in the community and fulfill Griffin’s social
responsibility.
During 2021, Hebei Hua Ao paid Rmb218.5million
($34 million) (2020: Rmb 95million) in taxes, royalties, social
security fees and other duties to Chinese Governmental
authorities and agencies. It is recognised as the largest tax
payer in the local Zhangbei County and one of the largest
• 500 head of cattle to Caijiaying Village to successfully
in the Zhangjiakou City prefecture.
create a dairy and cattle farm.
It is estimated that the Caijiaying Mine currently provides
direct and indirect employment to over 1,000 Chinese
nationals.
San Hao School Children’s day
31
RepoRt and accounts 2021 FinanCial results
In 2021, the Company and its subsidiaries (together the
Total cost of sales in 2021 of $63,224,000 was up 47.9%
“Group”) recorded;
• Revenues of $121,648,000 (2020: $75,403,000);
• Operating profits of $36,925,000 (2020: $15,148,000);
• Profit before tax of $36,526,000 (2020: $14,515,000);
• Profit after tax of $25,376,000 (2020: $8,910,000); and
on that incurred in 2020 of $42,737,000. In the main this
reflects more tonnes mined, hauled and processed in 2021.
Further cost increases occurred with the mine deepening,
increasing mine service costs and the distances ore is hauled,
whilst processing costs were impacted by tailings disposal
issues and increased maintenance costs. Costs were also
increased by a 4.5% appreciation of the Renminbi to the
• Basic earnings per share of 14.53 cents (2020: 5.16
US dollar and inflationary pay awards to all staff.
cents).
Administration expenses rose $3,981,000
(23%)
from
Record amounts of ore were mined and processed in 2021
$17,518,000 in 2020 to $21,499,000 in 2021. Administration costs
which, with improved zinc metal market prices and lower
include a charge of $3,876,000 (2020: $2,943,000) incurred
smelter treatment charges (“TCs”), resulted in Group
with Yuanrun based upon the profits of Hebei Hua Ao. Hebei
profits before tax increasing 152% from that in 2020
Hua Ao’s administration fees increased by 27% in 2021 with a
of $14,515,000 to $36,526,000 in 2021. Group profits
4.5% appreciation in the Renminbi exchange rate, pay awards
after tax increased by 185% from $8,910,000 in 2020 to
$25,376,000 in 2021.
Turnover in 2021 of $121,648,000 was up $46,245,000
(61%) on that achieved in 2020 of $75,403,000. This mainly
reflects zinc in concentrate sales up $43,856,000 (83%)
with: 41,949 tonnes of zinc metal in concentrate sold in
2021 compared with 32,276 tonnes in 2020, an increase of
30%; and average zinc metal in concentrate prices received
in 2021 of $2,311 per tonne compared with $1,645 received
in 2020, an increase of 40%. This price increase reflects an
increase in market prices with the average LME zinc metal
price of $3,007 per tonne in 2021 compared with $2,268
in 2020, but also a reduction in TCs with average TCs
equating to 23.1% of the average LME zinc price in 2021
compared with 27.5% in 2020.
to staff and additional environmental and safety regulatory
compliance costs. Administration costs outside the PRC were
impacted by investor and public relation costs curtailed in
previous years and significantly increased insurance premiums.
Foreign exchange losses of $51,000 (2020: gains $22,000)
were recorded in 2021, mainly on a weaker GBP sterling.
Interest of $236,000 (2020: $108,000) was received on bank
deposits in 2021. Interest of $309,000 (2020: $111,000) was
paid on short term bank loans. Finance interest on the lease
of the dry tailings facility at Caijiaying and the London office
totaling $11,000 (2020: $171,000) was charged in 2021.
Deemed interest on discounted rehabilitation provisions of
$84,000 (2020: $77,000) was charged in 2021.
Losses on the disposal of equipment of $293,000 (2020:
$1,129,000) were recorded with equipment being replaced
Lead and precious metal in concentrate sales in 2021 of
to meet higher Chinese environmental standards.
$31,915,000 were up 22.7% on that achieved in 2020
Income taxes of $11,150,000 (2020: $5,605,000) have been
of $25,999,000. This reflects increased gold metal in
charged in 2021.
concentrate sold and increased lead and silver in concentrate
prices received despite lower gold prices received.
In 2021, metal in concentrate sales were:
• Zinc 41,949 tonnes (2020: 32,276 tonnes);
• Gold 14,417 ozs (2020: 11,218 ozs);
Basic earnings per share in 2021 was 14.53 cents (2020: 5.16
cents) and diluted earnings per share was 13.47 cents (2020:
4.88 cents).
Cash generated from operations of $42,880,000 (2020:
$24,398,000) have been used in further developing the mine
and facilities and retained pending development of the Zone
• Silver 269,505 ozs (2020: 291,756 ozs); and
II area at Caijiaying.
• Lead 1,069 tonnes (2020: 1,425 tonnes).
Average prices achieved in 2021 were:
Attributable net assets per share at 31 December 2021 was
$1.50 (2020: $1.35).
Whilst the Directors do not recommend the payment of
• Zinc metal per tonne of $2,311 (2020: $1,645);
a dividend at this time, the Directors have discussed and
• Gold metal per oz of $1,691 (2020: $1,759);
• Silver metal per oz of $19.8 (2020: $17.7); and
will further consider a dividend policy later this year when
current political, social and economic circumstances permit
enabling such a policy to be instituted and executed over a
• Lead metal per tonne of $2,074 (2020: $1,339).
consistent, long term basis.
32
Griffin MininG LiMited strategiC review
OVERVIEW
ACQUISITIONS AND FURTHER
The objective of the directors and management is to
PROJECTS
ensure the long-term sustainability of the Company and its
business to benefit its shareholders and other stakeholders.
To achieve this objective, the directors and senior executives
seek to add value, manage risks and minimise costs whilst
pursuing economic returns commensurate to the risk taken
pursuing the following strategy.
In view of the significant potential of the Caijiaying Mine
and surrounding areas and given the Company’s knowledge
and expertise in China, the directors and management
have focused on the further development of the Caijiaying
Mine, investigation of prospective areas near the Caijiaying
Mine and other potential projects in other provinces of
China. In addition, the directors and senior executives
evaluate other mining companies and projects worldwide
to ascertain whether any acquisition can be made which
has the possibility of matching the returns provided by the
Caijiaying Mine.
CAIJIAYING
The Caijiaying Mine’s metal production capability has been
augmented with continued extensive exploration, expansion
of the mill processing facilities (including grinding and
flotation circuits) and ongoing underground infrastructure
development. Exploration has been focused on identifying
geological targets and evaluating the potential for significant
additional resources. Whilst the existing Mineral Resource
estimate confirms the availability of extensive resources
at the Caijiaying Mine for increased production, further
resource additions will provide an opportunity to further
increase the Caijiaying Mine’s production profile. This
includes more extensive exploration not only at Zones II
and III, but also at Zones V & VIII, which require extensive
further drilling to fully understand the size and nature of
these orebodies. Whilst the grant of a new mining licence
over Zones II and III permits production to be raised to 1.5
million tonnes per annum, further expansion of operations
will require further licences and permits from various
Chinese authorities which are proving increasingly complex
and time consuming to obtain.
Whilst the Company continues to develop the Caijiaying
Mine and explore the surrounding area, it also continues
to search for, and investigate, other potential acquisitions
of both gold and base metals projects that may be brought
into long term, economic production for a capital cost
that provides a substantial and justifiable return on equity
to shareholders. Relatively new geological, geophysical
and geochemical techniques, aided by new equipment, all
sourced or discovered in Australia, Europe and/or the USA,
have expanded the Company’s search criteria to include
virgin, exploration ground. Any found of value may be sold,
joint ventured or offered in a separate vehicle to existing
Griffin shareholders or retained by the Company and
developed for existing shareholders.
To affect this strategy the Company has further expanded
the scope and activities of China Zinc to encompass this
corporate goal.
In addition, a large number of potential mining projects
have been analysed worldwide. None have been successfully
consummated for a myriad of reasons including country
risk, negative findings during due diligence, a questionable
return calculated for the risk shareholders would need to
accept in funding the project to production, the overall
project risk profile and various other deficiencies in grade,
tonnes, metallurgy, depth and difficulty in mining.
CLIMATE CHANGE
Griffin studies the possible impact of climate change on
business operations and actively tackles climate change
where it is able to. This has involved identifying risks
related to climate change such as extreme weather and
sudden natural disasters including rainstorms, snowstorms,
typhoons, etc. that may lead to power supply interruptions
and production accidents, causing significant economic
losses and threatening personal safety. Accordingly, Griffin
has developed relevant measures to address these risks
including back-up diesel generators and ensuring sufficient
supplies of essential goods. In 2021, the Company upgraded
the emergency power generation facility from 3,200KW
to 4,000KW. The upgraded facilities can ensure the
continued operation of underground ventilation, drainage
and mill maintenance work in case of an emergency, thereby
reducing the risk of underground workers being trapped
due to power outages.
33
RepoRt and accounts 2021 Corporate governanCe
Griffin is incorporated in Bermuda, a jurisdiction which does
The Board does not have a formal diversity policy but plans
not have a formal overarching corporate governance code.
to review the need for such a policy annually, taking into
Under common law in Bermuda, shareholders are entitled
account the size of the Board and skills required.
to have the affairs of the Company conducted in accordance
with general law and the Company’s memorandum of
association and bye-laws.
The Board has formally established an audit committee
and a remuneration committee. The audit committee and
remuneration committee reports are given on pages 36 to
Bermuda law does not impose an all-embracing code of
40.
conduct on directors. The Company’s memorandum of
association and bye-laws comprise its constitution and
together with the Bermuda Companies Act prescribe
the ambit of the directors’ powers. Accordingly, if the
directors act ultra vires the Company’s constitution, they
are answerable to the Company. The function of the
substantive law is to supplement the internal constitutional
checks on a director’s powers and to deal with areas where
the Company’s constitution may be silent. Directors
generally are authorised to exercise all of the powers of the
Company that are not reserved to the shareholders under
the Company’s constitution or the Bermuda Companies
Act. Directors are personally appointed and
their
appointment may not be generally delegated or assigned,
although alternate directors may be appointed pursuant to
In view of the size of the Company and stability of the Board
and senior executives, a nomination committee has not been
established but will be appointed as the need arises.
As required by Bermuda company law, all the directors are
shareholders in the Company to align their interests with
that of the shareholders.
Various safeguards and checks have been instigated as part of
the Company’s system of financial controls. These include:
• Preparation of regular financial reports and management
accounts;
• Preparation and review of capital and operational
budgets;
the Bermuda Companies Act
• Preparation of regular operational reports;
The Company and its directors have reviewed and
• Prior approval of capital and other significant
considered the various corporate governance codes and have
expenditure;
adopted the Corporate Governance Code published by the
UK Quoted Company Alliance (“QCA”) and the principles
contained therein so far as the Board is able and believes it
is practicable. In effect, the directors continue to seek to add
value, manage risks and minimise costs to ensure the long
• Preparation and regular review of cash flow forecasts
and funding requirements;
• Regular review and assessment of foreign exchange risk
and requirements; and
term sustainability of the Company and its business.
• Regular review of commodity prices and assessment of
The board of directors (the “Board”) includes a number
hedging requirements.
of non-executive directors who, with the exception of
The directors recognise the principles in the QCA code and
Adam Usdan, are considered to be independent as their
have applied these where appropriate. In this regard:
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 seeks
to meet regularly within the confines of restrictions imposed
to contain Covid-19 transmissions, 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.
• Strategy: In view of the significant potential of the
Caijiaying Mine and surrounding areas and given the
Company’s knowledge and expertise in China, the
directors and management are focused on the further
development of the Caijiaying Mine, investigation of
prospective areas near the Caijiaying Mine and other
potential projects in China. In addition, the Company’s
directors and management continue to evaluate other
mining companies and projects worldwide for potential
acquisitions.
34
Griffin MininG LiMited • Shareholder expectations: The Directors maintain
A remuneration committee has been appointed with a
regular contact with significant shareholders through the
brief to set performance criteria.
Chairman, Finance Director and Senior Independent
Director and the Company retains an office
in
London as a point of contact for all shareholders and
potential shareholders in order to gauge the needs and
expectations of shareholders in the Company.
• Corporate culture: Both the Chairman and Finance
Director regularly visit the Group’s operations to meet
with management and other personnel. These visits
have been limited of late because of travel restrictions to
contain the Covid-19 pandemic. When able, the Board
• Stakeholders: The Company through Hebei Hua Ao
meets at least once a year at the Caijiaying Mine and
has invested heavily in the local community in China
elsewhere during the year. The safety of all personnel
and continues to maintain and further implement best
working at the Group’s operations is a priority with
practices for the protection of the environment and for
formal procedures in place to prevent and report any
the benefit of the local community. Further details are
safety and environmental issues. The Group will not
given within the Sustainability, Environment and Local
deal with any organisation or individual which it believes
Community report on pages 18 to 31.
To comply with Corporate Governance requirements set by
AIM in 2018 an audit committee was formed comprising
the non-executive directors Dal Brynelsen, Adam Usdan.
to be involved with slavery. The Company has formal
procedures regarding the avoidance of bribery and
corruption. The Group engages personnel regardless of
race or gender.
and Rupert Crowe, who died on 10 February 2021. Clive
• Governance structures: The Company has appointed
Whiley joined this committee on his appointment as
a Chief Operating Officer who reports directly to the
director on 13 August 2021.
• Risks: The Company and its directors have identified
and keeps under consideration, the risks facing the
Company and its subsidiaries (“the Group”). These risks
and how they are managed are detailed in the directors’
report on pages 44 to 47.
• Board of directors structure: The Board is headed by a
Chairman whose services are provided through a service
entity Keynes Capital (see report of the remunerations
committee on page 39. The Company has no Chief
Executive Officer. Accordingly, the roles of Chief
Executive Officer and Chairman have not been separated
as recommended by the QCA code for the above reason.
The Board also includes a full time executive Finance
Director as well as four non-executive directors.
• Board of directors, skills: The existing Board with
those of Hebei Hua Ao brings a balance of skills and
experience to the Company, including legal, financial,
mining, geological and market expertise. Details of each
director are given in the biographies of each director on
page 41.
Chairman, who in turn reports directly to the Board.
The Chief Operating officer oversees the Groups
operations with individual department heads reporting
directly to him. The Company has appointed a Chief
Financial Officer in China who reports to both the Chief
Operating Officer and directly to the Finance Director,
who in turn reports to the board of directors. Individual
department managers are able to communicate directly
to the Chairman concerning any issues of concern.
The Board has responsibility for setting the overall
strategy of the Group, its performance, management
and financial matters including, inter alia, the approval
of budgets, significant capital expenditure and financial
reports.
• Shareholder communications: In addition to the
publication of annual and interim reports, regulatory
news releases and maintaining a web site, as
aforementioned, the Company communicates directly
with major shareholders on a regular basis and maintains
an office in London, in part, as a point of contact with
shareholders.
Further details are provided on the Company’s web site
• Board performance: The
independent directors
www.griffinmining.com.
regularly consider the effectiveness and performance
of the Chairman and Finance Director and vice-versa.
35
RepoRt and accounts 2021 report oF the audit Committee
To comply with Corporate Governance requirements set by
and the corporate governance statement (insofar as it
AIM in 2018 an audit committee was formed comprising
relates to the audit and risk management).
the non-executive directors Dal Brynelsen, Adam Usdan.
and Rupert Crowe, who died on 10 February 2021. Clive
Whiley joined this committee upon his appointment as a
director on 13 August 2021. Dal Brynelsen resigned on
Internal Controls and Risk Management Systems
The Audit Committee:
5 May 2022 and Linda Naylor was appointed on 10 May
(a) Keeps under review the effectiveness of the Company’s
2022.
internal controls and risk management systems; and
THE ROLE OF THE AUDIT COMMITTEE
(b) Reviews and approve the statements to be included in
the Annual Report concerning internal controls and risk
The Audit Committee assists the Board in its oversight of
management.
the Company’s financial reporting, internal control and
risk management. In this regard, the Audit Committee is
charged with carrying out the following:
Financial Reporting
(c) Reviews taxation matters of the Group.
In the past year the Audit Committee has focused on the
following key areas:
a) The impact of the Covid-19 pandemic on operations
The Audit Committee monitors the integrity of the
and going concern;
financial statements of the Company, including its annual
and interim reports, preliminary results and any other
formal announcement relating to its financial performance
whilst reviewing significant financial reporting issues and
judgements contained within those announcements. The
Audit Committee also reviews summary financial statements,
significant financial returns to regulators and any financial
information contained in certain other documents, such as
announcements of a price sensitive nature.
The Audit Committee reviews and challenges where
necessary:
(a) The consistency of, and any changes to, accounting
policies, both on a year on year basis and across the
Company and its Group;
(b) The methods used to account for significant or unusual
transactions where different approaches are possible;
(c) Whether the Company has followed appropriate
accounting standards and made appropriate estimates
and judgements, taking into account the views of the
external auditor;
(d) The clarity of disclosure in the Company’s financial
reports and the context in which statements are made;
and
b) The value of fixed assets and the need for any impairment
provisions;
c) Conversion of Hebei Hua Ao from a Joint Venture to a
limited liability company with an indefinite life; and
d) Gift giving, entertaining, and the risk of bribery and
corruption.
Whistle blowing
The Audit Committee reviews the Company’s arrangements
for its employees to raise concerns, in confidence, about
possible wrongdoing in financial reporting or other matters.
The Audit Committee ensures that these arrangements
allow proportionate and independent investigation of such
matters and appropriate follow up action.
External Audit
The Audit Committee:
(a) Considers and make recommendations to the Board,
to be put to shareholders for approval at the annual
general meeting, in relation to the appointment, re-
appointment and removal of the Company’s external
auditor. The Audit Committee oversees the selection
process for new auditors and if an auditor resigns the
(e) All material information presented with the financial
Audit Committee shall investigate the issues leading to
statements, such as the operating and financial review
this and decide whether any action is required;
36
Griffin MininG LiMited (b) Oversees the relationship with the external auditor
(e) Reviews the findings of the audit with the external
including (but not limited to):
auditor. This includes but is not limited to, the following:
(i) Approval of their remuneration, whether fees for
(i) Discussion of any major issues which arose during
audit or non audit services and that the level of fees
the audit,
is appropriate to enable an adequate audit to be
conducted;
(ii) Approval of their terms of engagement, including
(ii) Any accounting and audit judgements, and
(iii) Levels of errors identified during the audit.
any engagement letter issued at the start of each
(f) Reviews the effectiveness of the audit;
audit and the scope of the audit;
(iii) Assesses annually the auditors’ independence and
objectivity taking into account relevant national,
(g) Reviews the representation letter(s) requested by the
external auditor before they are signed by management;
professional and regulatory requirements and the
(h) Reviews the management letter and management’s
relationship with the auditor as a whole, including
response to the auditor’s findings and recommendations;
the provision of any non-audit services;
and
(iv) Satisfies itself that there are no relationships (such
as family, employment, investment, financial or
business) between the auditor and the Company
(other than in the ordinary course of business);
(v) Agrees with the Board a policy on the employment
of former employees of the Company’s auditor,
then monitors the implementation of this policy;
(vi) Monitors the auditors’ compliance with relevant
ethical and professional guidance on the rotation
of audit partners, the level of fees paid by the
Company compared to the overall fee income
(i) Develops and implements a policy on the supply of
non audit services by the external auditor, taking into
account any relevant ethical guidance on the matter.
In order to fulfil these duties, the Audit Committee receives
regular financial and other reports from management and
has unfettered access to employees of the Company and its
subsidiaries.
Adam Usdan
Chairman of the Audit Committee
of the firm, office and partner and other related
12 May 2022
requirements; and
(vii) Assesses annually the auditors’ qualifications,
expertise and resources and the effectiveness of
the audit process which shall include a report from
the external auditor on their own internal quality
procedures;
(c) Meets with the external auditor, including once at the
planning stage before the audit and once after the audit
at the reporting stage and at other times when necessary.
The Audit Committee is required to meet the external
auditor at least once a year, without management being
present, to discuss their remit and any issues arising
from the audit;
(d) reviews and approves the annual audit plan and
ensures that it is consistent with the scope of the audit
engagement;
37
RepoRt and accounts 2021 report oF the remuneration Committee
To comply with Corporate Governance requirements
on a year by year basis.
set by AIM in 2018, a remuneration committee (the
“Remuneration Committee”) was formed comprising the
non-executive directors Dal Brynelsen and Adam Usdan.
On 13th August 2021 Clive Whiley was appointed a director
of the Company and to the Remuneration Committee. Dal
Brynelsen resigned on 5 May 2022 and Dean Moore was
appointed on 10 May 2022.
Nevertheless, the Remuneration Committee continues to
assess various remuneration policies to attract and retain
future high-calibre executives and motivate them to develop
and implement the Group’s business strategy in order to
optimise long-term shareholder value. It is intended that
such policy will build on past practice and apply in the
future.
THE ROLE OF THE REMUNERATION
The policy is being framed around the following key
COMMITTEE
principles:
The Remuneration Committee
is
responsible
for
• Total rewards will be set at levels that are sufficiently
determining and agreeing with the Board the broad
competitive to enable the recruitment and retention of
policy for the remuneration and employment terms of the
high-calibre executives;
Directors and other senior executives and, in consultation
with the Chairman, for determining the remuneration
packages of such other members of the executive
management of the Group, as it is designated to consider.
The Committee is also responsible for the review of, and
making recommendations to, the Board in connection with
share option plans and performance related pay and their
associated targets and for the oversight of employee benefit
structures across the Group.
All the executives engaged by the Griffin Group are
either employed by operating subsidiaries or independent
contractors
(contracting
through professional service
companies). Almost all of these executives or service
companies are employed or retained by Hebei Hua Ao. As
such, and as an operating mining company, Hebei Hua Ao
has always applied remuneration standards commensurate
with local and international mining industry standards and,
far more importantly, the legal and cultural traditions of the
People’s Republic of China.
The main Board of Directors has final approval of all
directors’ fees. No director may be involved in any decision
as to their own remuneration.
Directors’ Remuneration Policy
With only one executive director in the Group, the
remuneration committee has determined that it would
be inflexible, bureaucratically cumbersome and therefore
inappropriate to have an extensive and prescriptive formula
for determining one employee’s
total compensation
package. Accordingly, the executive director’s remuneration
• Total incentive-based rewards will be earned through
the achievement of performance conditions consistent
with shareholder interests;
•
The design of long-term incentives will be prudent and
will not expose shareholders to unreasonable financial
risk;
•
In considering the market positioning of reward
elements, account will be taken for the performance of
the Group and of each individual executive director; and
• Reward practice will conform to best practice standards
as far as reasonably practicable.
When formulating the scale and structure of remuneration,
the Remuneration Committee considers a number of
different factors including market practice and external
market data of the level of remuneration offered to directors
of similar type and seniority in other companies of the size
and activities of the Company.
In addition, the pay and employment conditions of
employees are also considered when determining directors’
remuneration. The Remuneration Committee may also
seek advice from external consultants where appropriate
and the services of FIT Remuneration Consultants have
been utilised in previous years. No director has been
involved in deciding the level and composition of their own
remuneration.
Long-term performance is incentivised by way of the grant
of share options.
is considered by the Remuneration Committee, with the
The Board seeks to strengthen the alignment of director,
assistance of outside executive compensation consultants,
employee and shareholder interests.
38
Griffin MininG LiMited Executive directors’ remuneration for 2021
Long Term Incentives
The executive directors’ (Finance Director) base salary was
As detailed in the Directors’ Report on page 43 and 44,
last increased with effect from 1 January 2014. Since the
options to purchase shares in the Company at 30 pence
year end the Finance Director’s salary has been increased
and 40 pence per share, exercisable at any time up to 31
from £315,000 per annum to £350,000 per annum with
December 2023, have been granted to directors and senior
effect from 1 April 2022.
employees.
No bonuses were paid to the Finance Director in 2021 or
Subsequent to the financial year end, with the unanimous
2020 in view of the challenges facing the Company during
agreement of all the option holders, the exercise period of
the Covid-19 pandemic.
In 2021, Roger Goodwin (Finance Director and Company
Secretary) received a basic salary of £315,000 (2020:
all the outstanding share purchase options were extended
from 31 December 2022, to 31 December 2023, comprising
options to purchase shares in the Company as follows:
£315,000) and pension contributions of £30,000 (2020:
- 4,518,333 new ordinary shares exercisable at 40 pence
£30,000). In addition, he received directors’ fees of $210,000
per share, all of which have vested: and
(2020: $201,000) from subsidiary companies.
- 15,582,500 new ordinary shares exercisable at 30 pence
The service contract between the Company and Roger
per share, all of which have vested.
Goodwin provides for three months’ notice by either side
or six months in the event of a change of control of the
Company.
Chairman
The Chairman has dedicated a significant portion of his
time to the Group and its operations. His services are
provided through a service entity, Keynes Capital, being the
registered business name of Keynes Investments Pty Ltd as
trustee for the Keynes Trust. In addition to the services of
the Chairman, Keynes Capital provides supporting services
to the Company in Australia, including support staff and
offices. The Chairman, Mladen Ninkov, is a director and
employee of Keynes Investments Pty Ltd.
Under a consultancy agreement with the Company, Keynes
Capital received fees of $2,737,000 (2020: $2,801,000), for
the provision of advisory and support services including
office premises, staff and consultants to Griffin and its
subsidiaries in 2021.
The consultancy agreement with Keynes Capital expired
on 30 June 2021 but was extended on a seven day rolling
notice period. Since the year end, the Keynes Capital
consultancy agreement has been renewed on similar terms,
to 31 December 2023, with no increase in fees.
In addition to the above, the Chairman received directors’
fees from subsidiary companies of $210,000 in 2020 (2020:
$201,000).
39
RepoRt and accounts 2021 repOrt OF the remuneratiOn COmmittee (contInued)
The following directors and senior executives agreed to the extension of options in which they have an interest:
Name
Number of options
exercisable at 40 pence
per new ordinary share.
Number of options
exercisable at 30 pence
per new ordinary share.
Roger Goodwin Finance Director
Dal Brynelsen Director
Rupert Crowe Director
Non Executive Directors
Vested
500,000
-
-
Vested
1,500,000
900,000
900,000
The non-executive Directors’ fees were last reviewed with
effect from 1 July 2019 when they were held at £66,125 per
annum. Since the year end, the non-executive directors’s
fees were reviewed and held at £66,125 per annum.
In view of Mr Dal Brynelsen receiving director fees from
Hebei Hua Ao ($186,000 in 2021 and $177,000 in 2020) he
In addition Mr Rupert Crowe received fees of $30,000 in
2021 for geological services over and above that expected
from him as part of his services as a non executive director.
Mr Clive Whiley was appointed a director on 13th August
2021 on an annual fee of £118,000. Since the year end Clive
Whiley has been granted further consultancy fees bringing
has agreed to forgo his fees from the Company.
his total fees to £306,125 per annum.
Total Directors’ Remuneration
The table below sets out the total remuneration payable to the Directors:
Fees Salary
2021
Pension
Contributions
$000
2020
Salary
Pension
Contributions
$000
$000
Total
$000
210
186
23
682
91
61
1,253
2,059
-
-
-
41
-
-
41
5
Fees
$000
201
262
114
201
84
-
862
-
-
-
402
-
-
402
61
1,831
Total
$000
201
262
114
641
84
-
1,302
1,908
-
-
-
38
-
-
38
16
Mladen Ninkov*
Dal Brynelsen
Rupert Crowe
Roger Goodwin
Adam Usdan
Clive Whiley
$000
210
186
23
210
91
61
$000
-
-
-
431
-
-
Total
781
431
Key personnel
121 1,933
902 2,364
46
3,312
923
2,233
54
3,210
*Keynes Capital, the registered business name of Keynes Investments Pty Limited as trustee for the Keynes Trust, received fees
under a consultancy agreement of $2,737,000 (2020: $2,801,000), 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.
Key personnel include senior executives engaged by Hebei Hua Ao and China Zinc Pty Limited.
Clive Whiley
Chairman of the Remuneration Committee
12 May 2022
40
Griffin MininG LiMited
direCtors
Mladen Ninkov, Chairman, Australian, holds a Master
Clive Whiley, Independent non-executive Director,
of Law Degree from Trinity Hall, Cambridge and Bachelor
British, has over thirty-five years’ experience in regulated and
of Laws (with Honours) and Bachelor of Jurisprudence
listed company governance positions, both as an executive
Degree from the University of Western Australia. He is the
and non-executive director, across a wide range of industries
principal of Keynes Capital. He has a mining, legal, fund
and geographies, including extensive business experience
management and investment banking background and is
in the People’s Republic of China since 1983 becoming a
admitted as a barrister and solicitor of the Supreme Court
member of the London Stock Exchange in 1983. Mr Whiley
of Western Australia. He was the Chairman and Managing
is currently Chairman of Mothercare Plc, China Venture
Director of the Dragon Capital Funds management group,
Capital Management Ltd, First China Venture Capital Ltd,
a director and Head of International Corporate Finance at
Y-Lee Ltd, and a non-executive Director of Sportech Plc.
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.
Linda Naylor, Independent non-executive Director,
British, is a graduate of the London School of Economics
and a Fellow of the Institute of Chartered Accountants in
England & Wales. A former partner in Grant Thornton
UK LLP, her experience has been gained over more than
twenty years working as a Nominated Adviser in the
Roger Goodwin, Finance Director, British, is a Fellow
Capital Markets team and as an Audit Partner specialising
of the Institute of Chartered Accountants in England and
in the natural resource sector. She was Chair of the Audit
Wales. He has been with the Company since 1996 having
Committee whilst a Governor of Portsmouth University.
previously held senior positions in a number of public and
As Finance Director of AIM listed Chaarat Gold Holdings
private companies within the natural resources sector. He
Limited from 2009 to 2018, she worked as part of a small
has a strong professional background, including that as a
executive team. Her responsibilities encompassed financial
manager with KPMG, with considerable public company
reporting, investor relations and fund raising as that
and corporate finance experience and experience of emerging
company transitioned from gold explorer to developer in the
markets.
Kyrgyz Republic.
Adam Usdan, Non-executive Director, USA, holds an
Dean Moore, Independent non-executive Director,
MBA from the Kellogg Graduate School of Management at
British, is a Fellow of the Institute of Chartered Accountants
Northwestern University with majors in Finance, Marketing,
in England & Wales with extensive public company
and Accounting, and a BA in English from Wesleyan
experience having previously been Chief Financial Officer
University. He is the President of Trellus Management
at Cineworld Group plc, N Brown Group plc, T&S Stores
Company LLC, an equity hedge fund based in the USA.
plc and Graham Group plc and formerly non-executive
Mr Usdan founded Trellus Management in January 1994
Chairman of Tuxedo Money Solutions Limited. He is
and has been in the investment advisory industry for over
currently a Director and Interim Chief Financial Officer of
30 years. Mr Usdan began his investment career in 1987 at
Dignity plc and an independent non-executive director and
Odyssey Partners where he was responsible for managing
Chairman of the Remuneration Committee at Cineworld
long/short U.S. equity (small to mid-cap) pools of capital.
Group plc and Audit Committee Chairman and Senior
Independent Director of Volex plc.
Dal Brynelsen, Director, Hebei Hua Ao, Canadian, is
a graduate of the University of British Columbia in Urban
Land Economics. Mr. Brynelsen has been involved in the
resource industry for over 40 years. He has been responsible
for the discovery, development and operation of several
underground gold mines during his career.
41
RepoRt and accounts 2021 senior exeCutives
Dr Bo Zhou, General Manager China, Australian, holds
Shirley Tsang, Director, China Zinc Limited, British,
a PhD in exploration geology from Sydney University and a
is a Chartered Management Accountant (United Kingdom)
BSc in economic geology from Peking University. He was
and a CPA (Hong Kong & Australia). She holds an MBA
Managing Director of Sinovus Mining Ltd, an ASX listed
(Finance) from the City University Business School, United
company with mineral interests in China. Prior to that he
Kingdom. She started her career as an auditor with Ernst
was the General Manager for Guangxi Golden Tiger Mining
& Whinney and moved on to business advisory practice for
JV, a Sino-Australian JV gold company focused on Guangxi,
international clients with Arthur Young. She was head of the
China, controlled by Golden Tiger Mining NL, an ASX
China and Hong Kong business advisor practice from 2003
listed company. He has also worked as the Senior Geologist
to 2017 in the Tricor Group. She has considerable experience
for Silk Road Resources (a TSX listed company), responsible
in corporate restructuring for international clients and best
for evaluating various gold properties in Gansu Province in
practice in corporate governance. She is currently Managing
central western China. Dr Zhou has considerable experience
Director of SEAJA Consultancy Limited in Hong Kong.
in the Chinese resources sector.
Glenn Sheldon, China Zinc Business Development
John Steel, Chief Operating Officer, Australian, is a
Manager, Australian, is a geologist holding a BSc from
graduate Mining Engineer from the Ballarat School of Mines
Adelaide University. He is a Fellow of the AusIMM and AIG,
and holds a Master of Business Administration from Deakin
Member of SocEcGeol. He is fluent in Mandarin Chinese
University. He is a member of the Australian Institute of
with special emphasis on geological and mineral industry
Mining and Metallurgy. John has extensive global mining
terms. Prior to joining Griffin he was Principal Geologist
experience including over a decade of in site operational
for Mining Associates, providing competent person services
expertise with tier one companies in Australia, Canada
to inter alia the Hong Kong Stock Exchange; Vice President
(Xstrata Mining PLC) and the Middle East (Barrick Gold
Exploration for RH Mining Resources Ltd in Hong Kong;
Corporation). John also has extensive supplier side experience
Business Development Manager Exploration East Asia for
holding country Managing Director positions in Norway
Sandvik Mining and Construction; JV General Manager
(EPC Groupe) as well as General Manager positions with
Dragon Mountain Gold in China; Exploration Manager,
several explosive and technology service providers within
Lotus Resources plc in Mongolia; Chief Representative for
Australia.
Wendy Zhang, Chief Financial Officer, Hebei Hua Ao,
Australian, holds a Master of Accounting degree from
Macquarie University, is a member of the Certified Practicing
Accountants of Australia and is a qualified member of the
Chinese Institute of Certified Public Accountants for 11
years. She spent 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.
Centerra Gold Inc in China; President and Exploration
Manager for TVI Pacific’s China WOFE - Hunan Pacific
Geological Exploration Inc; Site Manager Jinfeng for Sino
Gold Limited and Exploration and Business Development
Manager for Newmont China Limited.
42
Griffin MininG LiMited 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 2021.
FinanCial results
The Group profit before taxation for 2021 amounted to US$36,526,000 (2020: US$14,515,000). Taxation of US$11,150,000
(2020: US$5,605,000) has been provided. No dividends were paid in 2021 (2020: nil). US$25,376,000 has been credited to
reserves (2020: credited US$8,910,000).
The basic earnings per share amounted to 14.53 cents (2020: 5.16 cents). The attributable net asset value per share at 31 December
2021 amounted to 150 cents (2020: 135 cents).
Whilst the directors do not recommend the payment of a dividend at this time, in February 2021 the Company implemented
a share buy back programme of up to a value of $10 million to acquire up to five million ordinary shares over the next 3 years
to return excess monies not required to meet financial commitments and working capital requirements to shareholders, subject
to cash balances being available to undertake those purchases. Griffin believes the buybacks will be value accretive and value-
enhancing for the shareholders. The Company cannot guarantee that it will be successful in executing this program over the
period stated. This arrangement is in accordance with the Company’s general authority to repurchase shares.
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 2021 and the indication of likely future developments are set out on page 6 to 33.
direCtors
The Directors of the Company during the year were:
Mladen Ninkov – Australian – Chairman
Roger Goodwin – British - Finance Director
Dal Brynelsen – Canadian – Non-executive Director – Resigned 5 May 2022
Rupert Crowe – Australian / Irish – Non-executive Director – Deceased 10 February 2021
Adam Usdan – American (USA) – Non-executive Director
Clive Whiley – British – Appointed 13 August 2021 - Senior Non-executive Director
Linda Naylor – British – Appointed 5 May 2022 - Non-executive Director
Dean Moore – British – Appointed 5 May 2022 - Non-executive Director
Under the bye laws of the Company, the Directors serve until re-elected at the next Annual General Meeting of the Company.
The beneficial interests of the Directors holding office at 31 December 2021 and their immediate families in the share capital of
the Company were as follows:
Name
At 31 December 2021
At 1 January 2021
or on date of appointment
Ordinary
Options over ordinary
shares, number shares, number exercisable at
40 pence
30 pence
Ordinary
shares, number
Options over ordinary
shares, number exercisable at
40 pence
30 pence
Mladen Ninkov
33,001
-
Dal Brynelsen
397,001
900,000
-
-
Roger Goodwin
877,830
1,500,000
500,000
33,001
397,001
877,830
-
900,000
-
-
1,500,000
500,000
Adam Usdan*
29,209,348
Clive Whiley
100,100
-
-
-
-
33,242,890
1,166,667
100,100
-
-
-
* Mr. Adam Usdan is interested in 29,209,348 shares in Griffin representing 16.7% of the Company’s issued share capital,
7,960,221 of which are held directly with the remaining 21,249,127 shares being held by Trellus Partners LLP, the General
Partner of a Limited Partnership in which Mr. Usdan has a controlling interest. Other than this, all the directors interests
disclosed are beneficial.
43
RepoRt and accounts 2021
direCtOrs repOrt (contInued)
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.
Each 40 pence option entitles 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, subsequently extended to 31 December 2023. One third of these options vested on 31
December 2014, one third vested on 31 December 2015, and one third vested on 31 December 2016.
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 entitles 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 subsequently extended to 31 December 2023. One third of these options
vested immediately upon being granted, one third of these options vested on 31 December 2016, and a further third of each
holder’s options vested on the granting of a new mining licence over Zone II at the Caijiaying Zinc Gold Mine on 7 January 2021.
SUBSTANTIAL INTERESTS
Apart from Adam Usdan’s interests in the share capital of the Company, the Company has been notified that:
On 25 January 2021 Andrew Goffe and controlling undertakings held an interest in 26,513,657 ordinary shares in the Company
representing 15.227% of the Company’s then issued share capital; and
On 1 March 2021 Richard Griffiths and controlling undertakings held an interest in 24,313,224 ordinary shares in the Company
representing 13.93% of the Company’s then issued share capital, together with voting rights through third party financial
instruments equating to 3.34% of the Company’s then issued share capital.
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.
Further information on how the Group manages risk is given on pages 76 to 79.
Risk
Comment
Business
Impact
Mitigation
Economic Risks
Exposure to a fall in
zinc, gold, silver and
lead metal prices.
Revenue is dependent upon metal
prices.
High
to
Exposure
the
fluctuations
Renminbi / US dollar
exchange rate.
in
A fall in the value of the Renminbi
would reduce the US dollar value of
revenues, whilst an increase in the
value of Renminbi would increase
operating cost.
Moderate
44
common with other mining
In
in China the
companies operating
Group sells its products by auction to
local smelters and agents, however,
management continues
review
the appropriateness of hedging and
indicative cost of put options.
to
is
Renminbi
The
to
pegged
Management
foreign exchange
rates
appropriations of hedging.
the US
continually
loosely
dollar.
reviews
the
and
Griffin MininG LiMited prinCipal risks and unCertainties Continued
Risk
Comment
Business
Impact
Mitigation
Economic Risks (continued)
Exposure to increases
in the market prices of
materials,
equipment
and services the Group
uses.
Country Risks
to
is
The Group
increases in the market prices for
materials, services and equipment.
subject
Moderate
The Group seeks to agree long term
contracts for all major services and
goods supplied.
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.
Exposure to changes in
the 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
over 25 years, in which time the country
has been relatively stable, and retains
good relationships with PRC authorities.
Griffin actively engages with the local
PRC authorities and agencies to identify
and minimise the impact of changes in
PRC regulations.
Operational Risks
Reliance on Third
Party Contractors
Moderate
for
particularly
Griffin uses a number of unrelated
its
contractors,
mining, haulage and drilling activities.
Each of these activities has inherent
risk, including injury or death to the
contractor’s employees. Such events
could cause a total shutdown of all
operational activities which may take a
substantial time to recommence.
Exposure
hazards
to mining
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
Griffin has an extensive occupational
in
Health and Safety Department
conjunction with a Mining Manager
and his team of underground foremen
who constantly oversee all contractors’
activities, inter alia, punishing and
fining contractors for safety breaches.
Griffin keeps under consideration
moving to owner operated activities.
Griffin’s operational teams continually
monitor mining and other risks, and
report to 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.
45
RepoRt and accounts 2021
direCtOrs’ repOrt (contInued)
prinCipal risks and unCertainties Continued
Risk
Comment
Business
Impact
Mitigation
Operational Risks (continued)
Mine fatality
High
A fatality in the mine would result in
the closure of the mine and suspension
of operations for an indefinite time to
allow a full investigation by the PRC
authorities with subsequent penalties
possibly including fines, dismissal of
personnel held responsible and loss of
licences.
Other Risks
Exposure to a single
operation
Licence administration
Griffin is reliant upon a single operation,
being the Caijiaying Zinc Gold mine in
the PRC. Factors affecting operations
at Caijiaying have an impact upon the
Group.
Moderate
High
its
through
Griffin,
subsidiary
companies, holds a number of mining,
exploration and other
licences and
permits to operate. These normally
include
ongoing
operation and require periodic renewal.
Renewals are not guaranteed.
conditions
for
immediate
As noted above, Griffin’s operational
continually monitor mining
teams
and other risks and report to senior
management who report to the Board,
taking
appropriate
measures to minimise any identified risks
and hazards. In addition, the Group’s
operations are monitored and continually
inspected by the PRC local, County, City
and Provincial Safety Bureaus.
and
It is the Company’s policy to pursue
growth
through
opportunities
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.
Key management
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
significant effect on the operations of
the Company.
Moderate
Griffin has contractual arrangements
with all key employees which are
renewed on a regular basis.
Geological and Historical
Information
The loss of historical and/or geological
a very
information would have
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.
Climate Change
Climate change may have an impact on
operations and demand for metals.
Low
Griffin studies the possible impact
of climate change on operations,
identifying risks that may interrupt
operations and developing measures to
counter these.
46
Griffin MininG LiMited Risk
Comment
Business
Impact
Mitigation
Other Risks (continued)
Bribery and Corruption Whilst strict
internal policies and
procedures to ensure compliance with
applicable laws are applied to prohibit
all forms of bribery and corruption
the risk remains that employees or
contractors have circumvented these
policies and procedures which could
result in prosecution of the Group and
its officers.
Moderate
Pandemic
(Covid-19 / SARS etc)
A further outbreak of Covid-19 or
another virus may lead to restrictions
on operations being imposed by the
PRC authorities including a suspension
in operations.
Moderate
The Group prohibits bribery and
corruption in any form by directors,
employees or by those working for and/
or connected with the business. With
the advice and support of the Group’s
lawyers the Group has implemented
anti bribery and corruption policies
and procedures including: anti-bribery
instruction to staff and third party
contractors; on-going monitoring,
including setting up reporting channels;
and regular review of antibribery
reporting policies and procedures.
China imposed strict controls to control
the Covid-19 and SARS outbreaks
emerging from these relatively quickly.
Griffin works closely with the PRC
authorities to minimise the impact of
such outbreaks upon personnel and
operations.
POST BALANCE SHEET EVENTS
There were no significant post balance sheet events requiring adjustment to the financial statements. From 1 January 2022 to
16 March 2022, operations at Caijiaying were suspended in the run up to and during the Winter and Para Olympic games at
Chongli.
At the Annual General Meeting of the Company on 5 May 2022, Linda Naylor and Dean Moore were appointed Directors, and
Dal Brynelsen did not seek re-election as a Director of the Company.
GOING CONCERN
Whilst it is difficult to accurately predict future profitability and liquidity, particularly regarding the impact of metal prices, the
directors consider that at current metal prices and with the benefit of agreed banking facilities the Group can continue as a going
concern for the foreseeable future without the need to curtail operations. The Group regularly prepares cash flow forecasts and
revises its budgets to adapt to changing situations as the need arises. These have been extended for more than a year and adapted
for a number of plausible scenarios to confirm that in all cases the Group could maintain liquidity cover. Amongst other matters
management has taken into account sensitivities for the possible impacts of additional restrictions to contain further outbreaks
of Covid-19. Whilst China has experienced localised outbreaks of Covid-19 into 2022, strict travel restrictions, testing and
quarantine requirements implemented by the PRC authorities and Griffin have limited the impact and spread of Covid-19, such
that no cases of Covid-19 have been reported at Caijiaying. As a result, apart from a suspension in operations in the lead upto
and during the Winter Olympics at Chongli in the first quarter of 2022 to date, there have been no interruptions to operations at
Caijiaying since the initial outbreak of Covid-19. In the unlikely event of an outbreak of Covid-19 at Caijiaying, every endeavour
would be made to continue operations at Caijiaying, but supplies to and collection of concentrate from Caijiaying could be
interrupted whilst the Caijiaying site could be quarantined. With this in mind a one month suspension has been built into the
cash flow forecasts on a severe case scenario incorporating a reduction in market prices for metals. This is further considered in
the notes to the financial statements on page 60.
47
RepoRt and accounts 2021 direCtOrs’ repOrt (contInued)
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP were re-appointed auditors at the Annual General Meeting of the Company held on 5 May
2022 and have indicated their willingness to continue in office as auditors to the Company and a resolution proposing their
appointment will be put to the forthcoming Annual General Meeting.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE GROUP
FINANCIAL STATEMENTS
The directors are responsible for preparing the Group financial statements in accordance with applicable law and regulation.
The Bermuda Companies Act 1981 requires the directors to prepare Group financial statements for each financial year. Under
that law the directors have prepared the Group financial statements in accordance with International Financial Reporting
Standards (“IFRSs”) as adopted by the European Union. The directors must not approve the Group financial statements unless
they are satisfied that the Group financial statements 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 the Group financial statements, the directors are responsible for:
•
selecting suitable accounting policies and then applying them consistently;
•
stating whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures
disclosed and explained in the Group financial statements;
• making judgements and accounting estimates that are reasonable and prudent; and
• preparing the Group financial statements on the going concern basis unless it is inappropriate to presume that the Group will
continue in business.
The directors 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 keeping adequate accounting records that are
sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position of
the Group, and enable them to ensure the Group financial statements comply with applicable law and regulation.
DIRECTORS’ CONFIRMATIONS
In the case of each director in office at the date the Directors’ Report is approved:
•
so far as the director is aware, there is no relevant audit information of which the Group’s auditors are unaware; and
•
they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant
audit information and to establish that the Group’s auditors are aware of that information
This report was approved by the Board and signed on its behalf by:
Roger Goodwin
Finance Director and Company Secretary
12 May 2022
48
Griffin MininG LiMited
independent auditors’ report to the members oF
griFFin mining limited
report on the audit oF the group FinanCial statements
opinion
In our opinion, Griffin Mining Limited’s Group financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s affairs as at 31 December 2021 and of its profit and cash flows for the year
then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 1981 (Bermuda).
We have audited the financial statements, included within the Report and Accounts 2021 (the “Annual Report”), which
comprise: the Consolidated Statement of Financial Position as at 31 December 2021; the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated
Cash Flow Statement for the year then ended; and the notes to the financial statements, which include a description of significant
accounting policies.
basis For opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
our audit approaCh
Overview
Materiality
• Overall Group materiality: $1 million (2020: $1 million), based on 5% of the 3-year average profit
before tax.
• Performance Group materiality: $0.75 million (2020: $0.75 million)
Audit Scope
• We conducted full scope audits of three components out of the Group’s eleven entities which were
selected due to their size and risk characteristics.
• This enabled us to obtain 100% coverage of consolidated revenue, 99% coverage of consolidated
profit before tax and 100% coverage of total assets for the Group.
• To ensure sufficient oversight, direction and responsibility of the audit work performed by the
component audit team in China, the Group team performed a number of procedures throughout the
audit which included directing the audit approach and procedures, conducting remote file reviews and
conducting remote face to face meetings with local management and the component team.
Key Audit Matters
• Extension of the business licence.
•
Impact of Covid-19.
49
RepoRt and accounts 2021 independent auditors’ report to the members oF
griFFin mining limited
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified
by our audit.
The key audit matters below are consistent with last year.
key audit matter
Extension of the business licence
how our audit addressed the key audit
matter
Refer to Note 1, the Significant judgements and estimates
In addition to holding discussions with management, we
section and to Note 11, Property, Plant and Equipment.
have discussed with, and obtained correspondence from,
The current life of mine plan, which includes extraction of
resources from ZONE II and ZONE III, extends beyond 2037
to 2056. Under the terms of the Group’s current joint venture
agreement with Zhangjiakou Caijiaying Lead Zinc Mining, the
Group’s business licence will expire in 2037.
Management is currently working to convert their joint
venture agreement to a limited liability company. As a result of
this conversion management expects to be able to extend the
term of the business licence as a matter of routine and at no
additional cost.
Judgement is needed as to whether this conversion to a limited
liability company would enable an extension of the term of
the business licence as a matter of routine, and if it would lead
to additional cost being incurred. This impacts asset carrying
amounts and depreciation rates because a shorter business
management’s external legal advisors to understand the
process for extending the term of the business licence from
2037 to 2056 and confirmed their view that extending the
term of the business licence will be routine in nature and that
no additional costs will be incurred, once the joint venture
agreement is converted to a limited liability company.
We also requested management to sensitise their life of mine
plan to show the impact of the business licence not being
granted and note that, due to the significant headroom,
modelling this impact shows no impairment.
Based on these enquiries and procedures, we are satisfied
with management’s judgement that converting the current
joint venture agreement to a limited liability company will
enable an extension of the term of the business licence as a
matter of routine and at no additional cost.
licence would reduce the amount of resources that could be
Finally, we considered the adequacy of management’s
extracted.
We consider this to be a key audit matter due to the level of
judgement being exercised and the impact of this judgement on
asset carrying values.
disclosure of the key judgements in relation to the extension
of the business licence and consider them to be reasonable.
50
Griffin MininG LiMited independent auditors’ report to the members oF
griFFin mining limited
how our audit addressed the key
audit matter
Our procedures and conclusions in respect of going concern
are included in the “Conclusions relating to going concern”
section below.
We considered the appropriateness of disclosures in the
Annual Report with regards to the impact and risks related to
the pandemic and consider these to be appropriate.
key audit matter
Impact of Covid-19
Refer to the ‘Caijiaying’ and the ‘Sustainability, Environment
and Local Community’ sections of the Annual Report and
to Note 1, the Going Concern section, in the Notes to the
financial statements.
Covid-19 was declared a pandemic by the World Health
Organisation on 11 March 2020 and the ongoing response is
having an unprecedented impact on the global economy.
Management have set out in the Annual Report the impact that
Covid-19 has had on the Group and the actions that they have
taken, and continue to take, to address the pandemic and its
effect on the operations.
In the first quarter of 2020, operations at the Caijiaying Mine
were suspended for a month to comply with restrictions
instigated by the PRC authorities to contain the coronavirus
pandemic. However, once operations recommenced, mining
and processing operations soon returned to expected levels
with minimal further impact.
There were no major Covid-19 outbreaks in the Caijiaying
Mine.
Management has also considered the potential impact of
Covid-19 in undertaking their assessment of going concern.
Based on this analysis management concluded that there is no
material uncertainty in respect of the Group’s going concern
assessment
We determined management’s consideration of the impact of
Covid-19 to be a key audit matter.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry
in which it operates.
Griffin Mining Limited is a Bermuda company listed on AIM. The Group’s principal operation is the Caijiaying zinc mine in
China. In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by
us, as the Group audit team, or by the component auditors in China.
Our Group audit scope focused primarily on the Caijiaying zinc mine in China, which was subject to a full-scope audit by the
component auditors. A full scope audit was also performed over the Parent Company and a service entity by the Group team. The
above gave us coverage of 100% of consolidated revenue, 99% coverage of consolidated profit before tax and 100% coverage of
total assets for the Group.
51
RepoRt and accounts 2021 independent auditors’ report to the members oF
griFFin mining limited
As Covid-19 prevented travel to China, we were unable to make a site visit as planned; we instead conducted our oversight of
the component audit team through regular dialogue via conference calls, video conferencing and other forms of communication
as considered necessary as well as remote working paper reviews to satisfy ourselves as to the appropriateness of audit work
performed by the component audit team. We also attended key meetings virtually with local management and the component
audit team. We reviewed the audit work of the component audit team, which included file reviews, participation in key audit
discussions with local management and participation in the audit clearance meeting.
The Group engagement team directly performed the audit of the consolidation. This, together with additional procedures
performed at the Group level, gave us the evidence we needed for our opinion on the Group financial statements as a whole.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
$1 million (2020: $1million).
How we determined it
5% of the 3-year average profit before tax.
Rationale for benchmark applied
Profit is the key indicator of the Group’s performance and the most appropriate
benchmark for materiality. Due to volatility in commodity prices which has impacted
profitability, we have used a 3-year average profit before tax as the benchmark.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across components was between $150,000 and $900,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $50,000
(2020: $50,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
ConClusions relating to going ConCern
Our evaluation of the directors’ assessment of the Group’s ability to continue to adopt the going concern basis of accounting
included:
• Obtaining and reviewing the Group’s cash flow forecasts for the going concern period, challenging management’s assumptions
used and verifying that these were consistent with our existing knowledge and understanding of the business, as well as with
the Board-approved budget;
• Reviewing the Group’s cash flow forecasts under the severe but plausible downside scenario, evaluating the assumptions used,
and verifying that the Group is able to maintain liquidity within the going concern period under these scenarios;
• Testing the model for mathematical accuracy; and
• Assessing the adequacy of the disclosure provided in Note 1 of the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
52
Griffin MininG LiMited independent auditors’ report to the members oF
griFFin mining limited
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability
to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
reporting on other inFormation
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in
this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on
these responsibilities.
responsibilities For the FinanCial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities in respect of the Group Financial Statements, the directors
are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
53
RepoRt and accounts 2021 independent auditors’ report to the members oF
griFFin mining limited
reporting on other inFormation (contInued)
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group/industry, we identified that the principal risks of non-compliance with laws and
regulations related to unethical and prohibited business practices and compliance with the regulations of the Ministry of Land
and Resources of the PRC, and we considered the extent to which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the
Companies Act 1981 (Bermuda). We evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the principal risks were related to posting
inappropriate journal entries to manipulate results, and management bias in key accounting estimates. The Group engagement
team shared this risk assessment with the component audit team so that they could include the appropriate audit procedures in
response to such risks in their work. Audit procedures performed included:
• Enquiries of the directors, management and the Group’s legal counsel, including consideration of known or suspected
instances of non-compliance with laws and regulations and fraud;
•
Inspection of supporting documentation, where appropriate;
• Evaluation of management’s controls designed to prevent and detect irregularities;
• Review of minutes of meetings of the Board of Directors;
• Challenging assumptions and judgements made by management in relation to their significant accounting judgements and
estimates;
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
Review of related work performed by the component audit team, including their responses to risks related to management
override of controls and to the risk of fraud in revenue recognition.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Group’s members as a body in accordance with
Section 90 of the Companies Act 1981 (Bermuda) and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this independent auditors’ report is Timothy McAllister.
PricewaterhouseCoopers LLP
Chartered Accountants
London
12 May 2022
54
Griffin MininG LiMited Consolidated inCome statement
For the year ended 31 December 2021
(expressed in thousands US dollars)
Revenue
Cost of sales
Gross profit
Administration expenses
Operating Profit
Losses on disposal of plant and equipment
Provisions against intangible assets
Foreign exchange ( losses) / gains
Finance income
Finance costs
Other income
Profit before tax
Income tax expense
Profit for the year
Basic earnings per share (cents)
Diluted earnings per share (cents)
Notes
2
2
2
3
5
12
6
7
8
2021
$000
121,648
(63,224)
58,424
(21,499)
36,925
(293)
(11)
(51)
236
(404)
124
36,526
9
(11,150)
25,376
14.53
13.47
10
10
2020
$000
75,403
(42,737)
32,666
(17,518)
15,148
(1,129)
(10)
22
108
(359)
735
14,515
(5,605)
8,910
5.16
4.88
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
55
RepoRt and accounts 2021
Consolidated statement oF Comprehensive inCome
For the year ended 31 December 2021
(expressed in thousands US dollars)
Profit for the year
2021
$000
2020
Restated
$000
25,376
8,910
Other comprehensive income that will be reclassified to profit or loss
Exchange differences on translating foreign operations
Other comprehensive income for the year, net of tax
3,336
3,336
9,837
9,837
Total comprehensive income for the year
28,712
18,747
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
The 2020 exchange differences on translating foreign operations has been corrected from that reported in 2020 of $9,662,000.
56
Griffin MininG LiMited
Consolidated statement oF FinanCial position
As at 31 December 2021
(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
Other Payables
Long-term provisions
Deferred taxation
Finance leases
Current liabilities
Trade and other payables
Finance leases
Total current liabilities
Total equities and liabilities
Notes
2021
$000
2020
$000
11
12
13
14
15
16
19
20
21
22
23
22
275,296
266,709
387
325
275,683
267,034
4,516
2,174
38,159
44,849
5,333
6,675
16,435
28,443
320,532
295,477
1,749
69,334
3,690
2,072
(1,644)
2,896
(29,346)
14,635
199,190
262,576
10,352
2,667
3,240
794
1,728
68,470
3,690
2,072
(917)
2,830
(29,346)
11,365
173,814
233,706
13,487
2,200
3,359
-
17,053
19,046
40,726
177
42,342
383
40,903
42,725
320,532
295,477
Attributable net asset value per share to equity holders of parent
24
$1.50
$1.35
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The financial statements on pages 55 to 81 were approved by the Board of Directors and signed on its behalf by:
Mladen Ninkov
Chairman
12 May 2022
Roger Goodwin
Finance Director
57
RepoRt and accounts 2021
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T
Griffin MininG LiMited
Consolidated Cash Flow statement
For the year ended 31 December 2021
(expressed in thousands US dollars)
Net cash flows from operating activities
Profit before tax
Foreign exchange losses / (gains)
Finance income
Finance costs
Depreciation, depletion and amortisation
Provision against intangible assets
Losses on disposal of equipment
Decrease / (increase) in inventories
Decrease / (increase) in receivables and other current assets
(Decrease) / increase in trade and other payables
Tax paid
Net cash inflow from operating activities
Cash flows from investing activities
Interest received
Proceeds / (costs) on disposal of equipment
Payments to acquire – mineral interests
Payments to acquire – property, plant and equipment
Payments to acquire office lease, furniture & equipment
Payments to acquire – intangible fixed assets – exploration interests
Net cash outflow from investing activities
Cash flows from financing activities
Issue of ordinary shares on exercise of options
Interest paid
Purchase of shares for treasury
Bank loan advances
Repayment of bank loans
Finance lease repayments including interest
Net cash (outflow) from financing activities
Notes
6
7
11
12
6
11
11
12
2021
$000
36,526
51
(236)
404
16,530
11
293
817
4,936
(2,871)
(13,581)
42,880
236
1
(13,564)
(6,365)
-
(73)
(19,765)
885
(309)
(727)
15,500
(15,500)
(462)
(613)
2020
$000
14,515
(22)
(108)
359
12,801
10
1,129
(1,494)
(4,814)
5,666
(3,644)
24,398
108
(44)
(18,691)
(5,684)
(5)
(11)
(24,327)
15
(112)
-
-
-
(2,469)
(2,566)
Increase / (decrease) in cash and cash equivalents
22,502
(2,495)
Cash and cash equivalents at the beginning of the year
Effects of foreign exchange rates
Cash and cash equivalents at the end of the year
Cash and cash equivalents comprise bank deposits
Bank deposits
16,435
(778)
38,159
19,885
(955)
16,435
38,159
16,435
Included within net cash flows of $22,502,000 (2020: $2,495,000) are foreign exchange losses of $51,000 (2020: gains $22,000)
which have been treated as realised.
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
59
RepoRt and accounts 2021
notes to the FinanCial statements
1. basis oF aCCounting
The financial statements have been prepared in accordance with applicable International Financial Reporting Standards as
adopted by the EU and in accordance with the Bermuda Companies Act. The significant accounting policies adopted are detailed
below. These policies have been consistently applied to all years unless otherwise stated.
aCCounting Convention
The financial statements have been prepared under the historical cost convention.
new and amended standards adopted by the group
The Group has applied the following standards and amendments for the first time for their annual reporting period commencing
1 January 2021:
• Definition of Material - amendments to IAS 1 and IAS 8
• Definition of a Business - amendments to IFRS 3
•
Interest Rate Benchmark Reform - amendments to IFRS 9, IAS 39 and IFRS 7
• Revised Conceptual Framework for Financial Reporting
• Proceeds before Intended Use - Amendments to IAS 16
The amendments listed above did not have any impact on the amounts recognised in the current period and are not expected to
significantly affect future periods.
new standards and interpretations not yet adopted
At the date of authorisation of these financial statements, certain new and amended accounting standards and interpretations have
been published that are not mandatory for the year ending 31 December 2021, nor have they been early adopted by the Group.
These standards and interpretations are not expected to have a material impact on the Group’s consolidated financial statements
in the current or future reporting periods.
going ConCern
The financial statements have been prepared on a going concern basis. The Group regularly prepares cash flow forecasts and
revises its budgets to adapt to changing situations as the need arises. These have been extended for more than a year and adapted
for a number of severe but plausible scenarios to confirm that in potential adverse cases the Group could maintain liquidity cover.
Amongst other matters management has taken into account sensitivities for the possible impacts of additional restrictions to
contain further outbreaks of Covid-19. Whilst China has experienced localised outbreaks of Covid-19 into 2022, strict travel
restrictions, testing and quarantine requirements implemented by the PRC authorities and Griffin have limited the impact and
spread of Covid-19, such that no cases of Covid-19 have been reported at Caijiaying. As a result, apart from a suspension
in operations during and on the lead up to the winter Olympics at Chongli in the first quarter of 2022, there have been no
interruptions to operations at Caijiaying since the initial outbreak of Covid-19 in the first quarter of 2020. In the unlikely event
of an outbreak of Covid-19 at Caijiaying, every endeavour would be made to continue operations at Caijiaying, but supplies to
and collection of concentrate from Caijiaying could be interrupted whilst the Caijiaying site could be quarantined. With this in
mind a one month suspension has been built into the cash flow forecasts on a severe case scenario incorporating:
• A reduction in market prices to $3,000 per tonne of zinc from July 2022 onwards. Management considers this a reasonable
downside; and
• Mitigating actions within management’s control, including the deferral of payments to certain creditors for a short period.
• Management has held foreign exchange rates flat as they note that because the zinc price is pegged to the US Dollar and the
Group incurs costs in Renminbi there is a natural currency hedge.
On the aforementioned bases and with the existing bank facilities available to the Group, the board of directors consider the
Group will be able to meet its liabilities as they fall due and have prepared the financial statements on a going concern basis.
60
Griffin MininG LiMited notes to the FinanCial statements
Consolidation basis
The Group financial statements consolidate the financial statements 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 their activities. The Group obtains and exercises control through voting rights.
Management has assessed its involvement in Hebei Hua Ao and Hebei Sino Anglo in accordance with IFRS 10 and concluded
that it has control.
In making its judgement, management considered the Group’s voting rights, the relative size and dispersion of the voting rights
held by other shareholders and the extent of recent participation by those shareholders in general meetings.
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.
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 recognised on
a delivery or collection basis as at this point the performance obligations are satisfied. Delivery or collection occur following open
auction of metals in concentrate and where delivery is taken and cash received within 30 days of the agreement.
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 resources
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. Until such time intangible assets are not depreciated.
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 11).
Residual values
Material residual value estimates are updated as required, but at least annually and where adjustments are required these are made
prospectively.
depreCiation
Depreciation rates reflect the term of operations, extractable resource, and economic lives of the assets as follows:
• Mine acquisition, development, licence, pre production and land use rights (included in mineral interests) - on a unit of
production basis.
• Plant and buildings - over 25 years on a straight line basis with a 10% residual value.*
• 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.*
* included in mill and mobile equipment
61
RepoRt and accounts 2021 notes to the FinanCial statements
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 resources 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 estimate 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, resource estimates, and life of mine plan adjusted as
necessary to exclude the effects of future reorganisations and asset enhancements. Estimates and assumptions used in determining
whether an asset has become impaired are set out in note 11.
Impairment assessments are based upon a range of estimates and assumptions:
Estimates / Assumptions Basis
Future production:
Measured and indicated resource estimates together with processing capacity
Commodity prices:
Forward market and longer term price estimates
Exchange rates:
Current market exchange rates
Discount rates:
Cost of capital risk
mine Closure Costs
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 financial
statements in accordance with local requirements which is anticipated to be greater than the actual costs of site restoration.
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:
• Consumable stores and spares, at purchase cost 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
Classification
From 1 January 2018, the Group classifies its financial assets in the following measurement categories:
•
those to be measured subsequently at fair value (either through the Statement of Other Comprehensive Income “OCI” or
through profit or loss); and
•
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash
flows. For assets measured at fair value, gains and losses will be recorded either in profit or loss or in OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the
time of initial recognition to account for the equity investment at fair value through other comprehensive income (“FVOCI”).
62
Griffin MininG LiMited notes to the FinanCial statements
FinanCial assets (Continued)
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Classification of financial assets at amortised cost
The Group classifies its financial assets as at amortised cost only if both of the following criteria are met:
•
•
the asset is held within a business model whose objective is to collect the contractual cash flows; and
the contractual terms give rise to cash flows that are solely payments of principal and interest.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to
purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (“FVPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered
in their entirety when determining whether their cash flows are solely payment of principal and interest.
Impairment
The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised
cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables, see note 14 for further details.
Assets carried at amortised cost
For loans and receivables, the amount of a loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that had not been incurred), discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset will be reduced and the amount of the loss will be recognised in
profit or loss.
If a loan or held-to-maturity investment had a variable interest rate, the discount rate for measuring any impairment loss was the
current effective interest rate determined under the contract. As a practical expedient, the Group could measure impairment on
the basis of an instrument’s fair value using an observable market price. If, in a subsequent period, the amount of the impairment
loss decreased and the decrease could be related objectively to an event occurring after the impairment would be recognised (such
as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss will be recognised in
profit or loss.
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”.
63
RepoRt and accounts 2021 notes to the FinanCial statements
Foreign CurrenCy transaCtions
The financial statements 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, Hong Kong and
Australia. The functional and presentation currency of the Group and parent is US dollars. The functional currency of Hebei
Hua Ao is Renminbi.
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 financial statements 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:
• “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.
• “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.
• “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.
• “Chinese statutory re-investment reserve” represents a statutory retained earnings reserve under PRC law for future
investment by Hebei Hua Ao.
• “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.
• “Profit and loss reserve” represent retained profits and losses.
Non-controlling interests are determined by reference to the underlying agreements, with the allocation of the purchase
consideration on acquisition of non-controlling interests and extension of the Hebei Hua Ao business licence between that
capitalised to mineral interests and that charged to reserves by reference to the impact of future cash flows. 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.
64
Griffin MininG LiMited notes to the FinanCial statements
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 2021 the total expense recognised in profit or loss arising from share based transactions
was Nil (2020: Nil).
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:
Judgements
In assessing potential impairment adjustments and depreciation on a unit of production basis, management have assumed that
indicated as well as measured mineral resources will be recovered from Zones II and III at Caijiaying as good conversion from
inferred to indicated and indicated to measured has been achieved historically. It is further assumed that all necessary permits will
be obtained. In this regard, and in order to comply with amended PRC corporate law, the Company is seeking to convert Hebei
Hua Ao from a limited liability joint venture with a business licence that expires in 2037, to an equity limited liability company
with an indefinite term so that its business licence be renewed without significant cost.
Impairment review assumptions, exploration interests (note 12). 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. Non-impairment of assets is conditional upon continued exploration
licences and permits which the directors consider will be maintained or obtained as appropriate.
Estimates
Impairment review assumptions, property, plant and equipment (note 11). Impairments are assessed by comparison of the cash
generating unit’s (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 impacted by estimates of:
•
future prices of the commodities extracted. Estimates were made as at the balance sheet date and do not include changes in
future price estimates.
•
the expected tonnes and grade of ore mined. Management has assumed an increase in forecast production from current levels
of circa 1.0 million tonnes per annum to 1.3 million tonnes in 2023 (2020: 1.5 million tonnes estimated from 2022 onwards),
1.4 million tonnes per annum from 2023 and up to 1.6 million tonnes per annum thereafter as set out in the life of mine plan.
No alterations to existing processing facilities are required to facilitate the increase in production.
65
RepoRt and accounts 2021 notes to the FinanCial statements
signiFiCant judgements and estimates (Continued)
•
•
future zinc treatment costs.
future operating and capital expenditure.
• discount rates calculated using a capital asset pricing model.
Based on these estimates, the directors have determined that the Group requires the market price of zinc to be above $2,600 per
tonne with gold, silver and lead prices remaining at current prevailing levels, to avoid an impairment charge. It is also conditional
upon mining licences continuing and permits being granted, which the directors consider will be maintained or obtained as
appropriate.
Provisions for mine closure and rehabilitation costs have been made in accordance with the laws and regulations of the PRC
and as set out in the Hebei Hua Ao Mine Ecological Restoration Treatment and Land Reclamation Scheme (“the Scheme”) as
approved by Ministry of Natural Resources of the PRC. This Scheme provides for a mine life of 40.11 years from January 2019 to
February 2059. The Scheme incorporates a rehabilitation plan for “Mine Geological Environment Recovery” with an estimated
cost of RMB 65,619,400 ($10,292,000), and “Land Rehabilitation” with an estimated cost of RMB 54,566,100 ($8,558,000).
These amounts have been discounted over the deemed Life of Mine at a discount rate of 3.39%, being the PRC 40 year state
bond rate.
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 financial statements.
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 Board 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
66
Griffin MininG LiMited notes to the FinanCial statements
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 in note 2, as determined by the Board, management generally follows the Group’s service lines,
which represent the main products produced by the Group. Management considers 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 director to the Board 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.
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 11 for the depreciation methods and useful lives for assets
held under leases. The interest element of lease payments is charged to profit or loss, as finance costs over the period of the lease.
67
RepoRt and accounts 2021 notes to the FinanCial statements
2. segmental reporting
The Group has one business segment, the Caijiaying zinc gold mine in the People’s Republic of China. All revenues and costs
of sales in 2021 and 2020 were derived from the Caijiaying zinc gold mine.
REVENUE
China
Zinc concentrate sales
Lead and precious metals concentrate sales
Royalties and resource taxes
COST OF SALES: CHINA
Mining costs
Haulage costs
Processing costs
Depreciation (excluding depreciation in administration expenses)
Decrease / (increase) in stocks
ADMINISTRATION EXPENSES
China
Australia
UK / Bermuda
2021
$000
121,648
96,951
31,915
(7,218)
121,648
19,003
11,466
16,754
14,481
1,520
63,224
16,433
136
4,930
21,499
2020
$000
75,403
53,095
25,999
(3,691)
75,403
16,056
7,282
8,868
11,780
(1,249)
42,737
12,939
312
4,267
17,518
All revenues, cost of sales and operating expenses charged to profit relate to continuing operations and are allocated by
receipt / payment location.
TOTAL ASSETS
China
Australia
UK / Bermuda
CAPITAL EXPENDITURE
China
Australia
UK / Bermuda
3. Profit from Operations
Profit from operations is stated after charging:
Fees for the audit of the Company
Fees for the audit of subsidiaries
Staff costs
Service fees to Zhangjiakou Yuanrun Enterprise Management
Average number of persons employed by the Group
68
312,026
1,011
7,495
320,532
19,929
-
963
20,892
2021
$000
190
98
10,304
4,279
No.
448
290,147
967
4,363
295,477
24,375
-
5
24,380
2020
$000
165
82
8,324
3,320
No.
435
Griffin MininG LiMited
notes to the FinanCial statements
4. direCtors’ and key personnel remuneration
The following fees and remuneration were receivable by the Directors holding office and key personnel engaged during the year:
Fees Salary
2021
Pension
Contributions
$000
2020
Salary
Pension
Contributions
$000
$000
Total
$000
210
186
23
682
91
61
1,253
2,059
3,312
-
-
-
41
-
-
41
5
46
Fees
$000
201
262
114
201
84
-
862
-
-
-
402
-
-
402
61
1,831
923
2,233
Total
$000
201
262
114
641
84
-
1,302
1,908
3,210
-
-
-
38
-
-
38
16
54
Mladen Ninkov*
Dal Brynelsen
Rupert Crowe
Roger Goodwin
Adam Usdan
Clive Whiley
$000
210
186
23
210
91
61
$000
-
-
-
431
-
-
Total
781
431
Key personnel
121 1,933
902 2,364
Key personnel comprise individuals in senior management positions.
*Keynes Capital, the registered business name of Keynes Investments Pty Limited as trustee for the Keynes Trust, received fees
under a consultancy agreement of $2,737,000 (2020: $2,801,000), 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 granted to the directors in 2021 or 2020. Trellus Partners LLP in which Adam Usdan has an interest
exercised share purchase options over 1,166,666 new ordinary shares in the Company at an exercise price of 30 pence per share.
5. losses on disposal oF plant and equipment
Losses on disposal of plant and equipment
6. FinanCe inCome
Interest on bank deposits
7. FinanCe Costs
Interest payable on short term bank loans
Interest on rehabilitation provisions
Finance lease interest
8. other inCome
Scrap and sundry other sales
2021
$000
293
2021
$000
236
2021
$000
309
84
11
404
2021
$000
124
2020
$000
1,129
2020
$000
108
2020
$000
111
77
171
359
2020
$000
735
69
RepoRt and accounts 2021
notes to the FinanCial statements
9. inCome tax expense
Profit for the year before tax
2021
$000
36,526
Expected tax expense at a standard rate of PRC income tax of 25% (2020: 25%)
9,132
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
- In respect of other timing differences
Adjustments for permanent timing differences other
Withholding tax on intercompany dividends and charges
Current taxation expense
Deferred taxation expense / (credit)
Origination and reversal of temporary timing differences
Total tax expense
934
890
(4)
372
21
11,345
(195)
(195)
11,150
2020
$000
14,515
3,629
567
(298)
-
1,051
232
5,181
424
424
5,605
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 2021 (25% in 2020) based upon the profits calculated under Chinese Generally Accepted Accounting Principles
(Chinese “GAAP”).
Withholding tax is recognised as a current tax charge when paid. As the Company can control the timing of payments giving
rise to withholding tax, deferred tax liabilities for unpaid withholding taxes on unremitted earnings and undistributed dividend
payments are recognised using a ‘probable’ threshold (based on the recognition threshold in IAS 12) , and are reflected at the
amount expected to be paid to taxation authorities. Unremitted earnings and undistributed dividend payments from the Group’s
Chinese mining operation total US$124.9m (2020: $109.6m).
10. earnings per share
The calculation of the basic earnings per share is based upon the earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year. The calculation of diluted earnings per share is based on the basic
earnings per share on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.
Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:
Earnings
$000
2021
Weighted
Average
Per
share
number of amount
(cents)
shares
2020
Earnings Weighted
Average
$000
Per
share
number of amount
(cents)
shares
Basic earnings per share
Earnings attributable to ordinary shareholders
25,376
174,653,602
14.53
8,910
172,788,420
5.16
Dilutive effect of securities
Options
-
13,730,107
(1.06)
-
9,861,227
(0.28)
Diluted earnings per share
25,376
188,383,709
13.47
8,910
182,649,647
4.88
70
Griffin MininG LiMited
notes to the FinanCial statements
11. property, plant and equipment
At 1 January 2020
Foreign exchange adjustments
Additions during the year
Provision for licence transfer fees
Change in estimate of mine closure costs
Adjustment for change in lease accounting estimate
Disposals
Depreciation charge for the year
At 31 December 2020
Foreign exchange adjustments
Transfer
Additions during the year
Change in estimate of mine closure costs
Release of rehabilitation deposits
Disposals
Depreciation charge for the year
At 31 December 2021
At 1 January 2020
Cost
Accumulated depreciation
Net carrying amount
At 31 December 2020
Cost
Accumulated depreciation
Net carrying amount
At 31 December 2021
Cost
Accumulated depreciation
Net carrying amount
Mill and
Mineral
interests mobile mine
equipment
Offices,
furniture &
equipment
Total
$000
$000
$000
$000
177,583
50,373
331
228,287
8,292
18,691
16,338
(115)
697
-
(6,542)
214,944
3,405
(773)
13,564
327
(435)
-
(10,200)
220,832
222,589
(45,006)
177,583
267,763
(52,819)
214,944
285,471
(64,639)
220,832
3,408
5,684
-
-
(697)
(1,085)
(6,084)
51,599
1,224
773
6,365
-
-
(294)
(6,180)
53,487
80,935
(30,562)
50,373
90,173
(38,574)
51,599
97,910
(44,423)
53,487
5
5
-
-
-
-
11,705
24,380
16,338
(115)
-
(1,085)
(175)
(12,801)
166
266,709
(2)
-
963
-
-
4,627
-
20,892
327
(435)
(294)
(150)
(16,530)
977
275,296
573
304,097
(242)
(75,810)
331
228,287
583
358,519
(417)
(91,810)
166
266,709
1,544
384,925
(567)
(109,629)
977
275,296
Mineral interests comprise the Group’s interest in the Caijiaying ore bodies including costs 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.
Mill and mobile mine equipment include $5,795,000 (2020: $3,872,000) of assets under construction yet to be depreciated.
The offices, furniture and equipment disclosed above relates solely to the fixed assets, including leased offices, of Griffin Mining
(UK Services) Limited and China Zinc Pty Limited.
71
RepoRt and accounts 2021
notes to the FinanCial statements
11. property, plant and equipment (Continued)
During 2013 plant and equipment with a deemed value of $11,381,000, revalued in 2019 to $14,150,000, were acquired under
a finance lease, upon which depreciation of $8,132,000 (2020: $6,712,000) has been provided. At 31 December 2021 the net
carrying amount of this equipment was $7,351,000 (2020: $8,417,000). In 2019 the London office lease was capitalised, and in
November 2021 renewed. At 31 December 2021 the net carrying amount of this office was $963,000 (2020: $124,000).
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. These forecasts are based upon both past and expected future performance, available
resources and expectations for future markets. Management determined there were no impairment indicators at 31 December
2021 (2020: nil). However, as best practice management have updated the impairment model.
In determining any indications of impairment in the carrying value of the Caijiaying Mine the directors have reassessed the net
carrying value of capitalised costs at 31 December 2021 by reference to the estimated mineral resources at Caijiaying that may
be extracted by 2056 and 2037 when the current business licence of Hebei Hua Ao expires. However, it is expected that Hebei
Hua Ao will be converted to an equity joint venture company with an indefinite life before then in order to comply with new
PRC legislation. Accordingly a Life of Mine plan (“LOM”) has been prepared by the Company that indicates the continued
extraction of ore until 2056. In estimating the discounted future cash flows from the continuing operations at the Caijiaying mine
the following principal assumptions have been made:
• Future market prices for zinc of $3,000 (2020: $2,500) per tonne, gold of $1,800 (2020: $1,800) per troy ounce and silver of
$22.5 (2020: $20.0) per troy ounce;
• Zinc treatment charges of 30% (2020: 30%) of market prices;
• Extraction of measured and indicated resources of 23.8 million tonnes (2020: 25.5 million tonnes) to 2037 when the current
business licence of Hebei Hua Ao expires, with ore mined and processed rising to a maximum rate of 1.6 million tonnes of
ore per annum and the extraction of 50.3 million tonnes by 2056;
• Operating costs, recoveries and payables based upon past performance and that budgeted for 2022;
• Capital costs based upon that initially scheduled with sustaining capital based on future scheduling;
• Discount rate of 10% (2020: 10%);
• Continued maintenance and grant of applicable licences and permits;
• No significant impact as a result of climate change, earthquakes or other natural events; and
• A Renminbi to US dollar exchange rate of Rmb6.5 to $1.
12. intangible assets - exploration interests
China – mineral exploration interests
At 1 January 2020
Foreign exchange adjustments
Additions during the year
Impairment during the year
At 31 December 2020
Additions during the year
Impairment during the year
At 31 December 2021
$000
322
2
11
(10)
325
73
(11)
387
Intangible assets represent costs on acquisition, plus subsequent expenditure on licences, concessions, exploration, appraisal
and development work in respect to regional exploration in China. 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.
72
Griffin MininG LiMited
notes to the FinanCial statements
12. intangible assets - exploration interests (Continued)
Upon economically exploitable mineral deposits being established, sufficient finance will be required to bring such discoveries
into production. At 31 December 2021 impairment charges of $11,000 (2020: $10,000) had been provided and charged to the
income statement in respect of the above exploration costs previously capitalised by Hebei Sino Anglo.
13. inventories
Underground ore stocks
Surface ore stocks
Concentrate stocks
Spare parts and consumables
2021
$000
603
277
123
3,513
4,516
2020
$000
1,332
423
728
2,850
5,333
All inventories are expected to be sold, used or consumed within one year of the balance sheet date.
The Group did not have any significant slow moving or defective inventories at 31 December 2022 (2020: nil) requiring write
off to the Income Statement
14. reCeivables and other Current assets
Trade receivables
Other receivables
Prepayments
2021
$000
-
344
1,830
2,174
2020
$000
4,485
338
1,852
6,675
Any expected credit losses on the recoverability of receivables are not expected to be material.
Prepayments include $428,000 (2020: $1,085,000) in respect of supplies and services for non-current assets.
15. share Capital
AUTHORISED:
2021
2020
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
172,826,228
1,728
172,786,228
1,728
Shares issued in the year on exercise of share purchase options
2,066,666
21
40,000
-
At 31 December
174,892,894
1,749
172,826,228
1,728
Share purchase options were exercised over 1,791,666 new ordinary shares at 30 pence per share and over 275,000 new ordinary
shares at 40 pence per share in 2021 (2020: options over 40,000 new ordinary shares were exercised at 30 pence per share.)
16. shares held in treasury
At 1 January
Bought back in during the year
At 31 December
2021
Number
$000
540,000
399,799
917
727
2020
Number
540,000
$000
917
-
-
939,799
1,644
540,000
917
In 2021 399,799 of the Company’s ordinary shares were purchased at an average price of 132p (2020; none).
73
RepoRt and accounts 2021
notes to the FinanCial statements
17. share options
At 1 January
2021
Number
Granted/
(exercised)
Number
At 31 December
2021
Number
Options exercisable at 30 pence per share to 31 December 2023
17,374,166
(1,791,666)
15,582,500
Options exercisable at 40 pence per share to 31 December 2023
4,793,333
(275,000)
4,518,333
22,167,499
(2,066,666)
20,100,833
Share purchase options were exercised over 1,791,666 new ordinary shares in 2021 at 30 pence per share and over 275,000 new
ordinary shares at 40 pence per share (2020: options over 40,000 new ordinary shares were exercised at 30 pence per share.)
The following table shows the number and weighted average exercise price of all the unexercised share options and warrants at
the year end:
2021
2020
Number Weighted average
exercise price
Pence
Number Weighted average
exercise price
Pence
Outstanding at 1 January
Exercised during the year
Outstanding at 31 December
22,167,499
(2,066,666)
20,100,833
32.2
(31.3)
32.2
22,207,499
(40,000)
22,167,499
32.2
(40.0)
32.2
The estimated value of the options exercisable at 40p up to 31 December 2023, 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 2023, 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 2023
Options expiring
31 December 2023
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 $nil (2020: $nil) during the year ended 31 December 2021 relating to equity settled
share option scheme transactions.
18. dividends
No dividends were paid in 2021 (2020: nil).
19. other payables
PRC licence fees
74
2021
$000
10,352
2020
$000
13,487
Griffin MininG LiMited
notes to the FinanCial statements
20. long-term provisions
PROVISIONS FOR MINE CLOSURE COSTS
At 1 January
Change in estimate (note 11)
Interest charges
Foreign exchange adjustments
At 31 December
2021
$000
2,200
327
84
56
2,667
2020
$000
2,150
(115)
77
88
2,200
Provisions for mine closure and rehabilitation costs have been made in accordance with the laws and regulations of the PRC
and as set out in the Hebei Hua Ao Mine Ecological Restoration Treatment and Land Reclamation Scheme (“the Scheme”) as
approved by Ministry of Natural Resources of the PRC. This Scheme provides for a mine life of 40.11 years from January 2019 to
February 2059. The Scheme incorporates a rehabilitation plan for “Mine Geological Environment Recovery” with an estimated
cost of RMB 65,619,400 ($10,292,000), and “Land Rehabilitation” with an estimated cost of RMB 54,566,100 ($8,558,000).
These amounts have been discounted over the deemed Life of Mine at a discount rate of 3.39% (2020: 3.7596%), being the PRC
40 year state bond rate.
21. deFerred taxation
At 1 January
Foreign exchange adjustments
(Credit) / charge for the year
At 31 December
2021
$000
3,359
76
(195)
3,240
2020
$000
2,731
204
424
3,359
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 deductible for taxation purposes.
22. lease liabilities
At 1 January
Foreign exchange adjustments
Advance during the period
Interest charges
Repayments in the year
At 31 December
Amounts falling due in more than one year
Amounts falling due within one year
2021
$000
383
76
963
11
(462)
971
794
177
971
2020
$000
2,600
81
-
171
(2,469)
383
-
383
383
Under the terms of an agreement Hebei Hua Ao pays Rmb21.32 per wet tonne treated by the dry tailings facility at Caijiaying. At
the end of the agreement term in February 2021, this facility was due to become the property of Hebei Hua Ao with no further
payment. This agreement was renewed in 2021 for one year and further extended in 2022 on the same terms, with all charges
for ore processed charged to cost of sales. In determining the initial total lease 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.
75
RepoRt and accounts 2021
notes to the FinanCial statements
22. lease liabilities (Continued)
The Company entered into an agreement in October 2016 to rent offices for 12 years from 1 November 2016 with a five year break.
As required under IFRS 16 the Group have recognised a right to use assets in respect of this lease having a value of $371,000 as at 1
January 2019 with a depreciation of $248,000 provided in the year, and a liability of $97,000 all of which is current. This lease was
renewed in October 2021 with a deemed value of $1,581,000 upon which depreciation of $618,000 has been provided.
Minimum lease payments on leases entered into by the Group are as follows:
Within one year
Between 1 and 2 years
Between 2 and 3 year
Between 3 and 4 years
Between 4 and 5 years
Later than 5 years
23. trade and other payables
Trade creditors
Other creditors
Business taxation payable
2021
$000
177
169
169
169
169
338
1,191
2021
$000
19,358
6,174
2,884
Zhangjiakou Yuanrun Enterprise Management Consulting Service Co., Ltd (Note 30)
5,638
Accruals
6,672
40,726
2020
$000
490
12
0
0
0
0
502
2020
$000
13,821
7,624
5,120
4,246
11,531
42,342
All amounts are short term. The carrying values of all trade and other payables are considered to be a reasonable approximation
of fair value.
24. attributable net asset value per share to total equity per holders
oF parent shares
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 2021 of $262,576,000 ($233,706,000 at 31 December 2020) divided by the number of ordinary shares in
issue at 31 December 2021 of 174,892,894 (172,826,228 at 31 December 2020).
25. 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, Hong Kong dollars, and Australian Dollar bank deposits held to cover future sterling expenditure estimates.
76
Griffin MininG LiMited
notes to the FinanCial statements
25. risk management (Continued)
Currently the Group does not carry out any significant operations in currencies outside the above.
The Group currently does not have a formal foreign currency hedging policy but retains foreign currency to meet future
requirements. Management monitors foreign exchange exposure and considers hedging significant foreign currency exposure
should the need arise. 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
2021
$000
518
Australian dollar bank deposits translated into United States Dollars at the closing rate are as follows:
Short term bank deposits
2021
$000
983
Renminbi bank deposits translated into United States Dollars at the closing rate are as follows:
Short term bank deposits
2021
$000
30,477
2020
$000
1,270
2020
$000
909
2020
$000
7,420
The following table illustrates the sensitivity of the net results for the year and equity with regards to the Group’s Renminbi
deposits and the Renminbi US Dollar exchange rate. It assumes a + / - 10% (2020: 10%) change in the Renminbi exchange rate
for the year ended 31 December 2021. These changes are considered to be reasonable based on observation of current market
conditions for the year ended 31 December 2021. The sensitivity analysis is based upon the Group’s Renminbi deposits at each
reporting date.
If the Renminbi had strengthened against the US Dollar by 10% (2020: 10%) this would have had the following impact:
Net result for the year and on equity
2021
$000
3,387
If Renminbi had weakened against the US Dollar by 10% (2019: 10%) this would have the following impact:
Net result for the year and on equity
2021
$000
(2,771)
2020
$000
804
2020
$000
(658)
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 relatively small amounts held in Sterling, Australian dollars, and Hong Kong dollars the effect on the net results and equity
of changes in Renminbi and Australian dollar exchange rates are not expected to be significant.
As a result of a reduction in Sterling deposits, the impact of changes in the Sterling US Dollar exchange rate are considered
minimal. In 2020 a strengthening of Sterling of 10% was reported as increasing the net results for 2020 and an equity of $141,000
and a weakening of $115,000.
77
RepoRt and accounts 2021
notes to the FinanCial statements
25. 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:
2021
Rmb
$000
AusD
$000
GBP
$000
729
32,804
1,000
(1,300)
(42,189)
(571)
(9,385)
(37)
963
2020
Rmb
$000
GBP
$000
1,470
17,945
(414)
(46,279)
1,056
(28,334)
AusD
$000
967
(152)
815
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 + 100% and - 100% (2020: + 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
2021
2020
Plus 100% Minus 100%
Plus 300% Minus 100%
$000
236
$000
(236)
$000
296
$000
(108)
Fixed and non interest bearing financial assets and liabilities are as follows:
2021
2020
Floating Non interest
bearing
interest rate
Total
Floating Non interest
bearing
interest rate
Total
$000
$000
$000
$000
$000
$000
38,159
-
38,159
(971)
-
(971)
-
344
344
38,159
344
38,503
-
(48,193)
(971)
(48,193)
(48,193)
(49,164)
16,435
-
16,435
(383)
-
(383)
-
4,823
16,435
4,823
4,823
21,258
-
(50,709)
(383)
(50,709)
(50,709)
(51,092)
Financial assets
Cash at bank
Other receivables
Total Financial assets
Finance lease liabilities
Trade and other payables
Total Financial liabilities
Net Financial assets / (liabilities)
37,188
(47,849)
(10,661)
16,052
(45,886)
(29,834)
Other receivables in 2020 have been restated to exclude prepayments, and other payables in 2020 have been restated to exclude
tax payable.
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 2021 or in 2020.
78
Griffin MininG LiMited
notes to the FinanCial statements
25. risk management (Continued)
Commodity Risk (continued)
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 30% and minus 30% (2020: plus 30% and minus 30%), 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
Net result for year – gold
Net result for year – silver
Credit risk
2021
Plus
$000
Minus
$000
2020
Plus
$000
Minus
$000
20,504
(20,504)
11,077
(11,077)
1,794
(1,794)
4,440
(4,440)
786
(786)
1,162
(1,162)
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
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.
Liquidity risk
Prudent liquidity risk management implies maintaining cash, marketable securities and adequate credit facilities to meet financial
obligations as they fall due. At 31 December 2021 the Group held cash and cash equivalents (bank deposits) with high credit
financial institutions of $38,159,000 (2020: $16,435,000) to meet financial obligations and apart from lease, trade and other
payables had no bank loans or similar financial liabilities.
Management monitors rolling cash flow forecasts on a weekly basis and keeps under review bank financing facilities at a local and
Group level, to ensure sufficient liquidity is maintained to meet future financial obligations. This also includes regular review of
metal market prices and foreign currency requirements.
26. 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 $262,576,000 at 31 December 2021.
79
RepoRt and accounts 2021
notes to the FinanCial statements
27. 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, the United Kingdom, Hong Kong 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
Cash and cash equivalents
FINANCIAL LIABILITIES
Financial liabilities at amortised cost
Trade and other payables
Contractual maturities of financial liabilities:
2021
$000
38,159
38,159
14,774
34,391
49,165
2020
$000
16,435
16,435
17,242
33,850
51,092
At 31 December 2020
Within
1 year
Between 1
and 2 years
Between 2
and 3 years
Over
3 years
Total contractual
cash flows
Carrying amount
(assets)/liabilities
$000
$000
$000
$000
$000
$000
Non-derivatives
Trade and other payables
37,222
3,372
3,372
6,744
Lease liabilities
490
12
-
-
Total non-derivatives
37,712
3,384
3,372
6,744
Derivatives
-
-
-
-
50,710
502
51,212
-
50,710
383
51,093
-
At 31 December 2021
Within
1 year
Between 1
and 2 years
Between 2
and 3 years
Over
3 years
Total contractual
cash flows
Carrying amount
(assets)/liabilities
$000
$000
$000
$000
$000
$000
Non-derivatives
Trade and other payables 37,841
Lease liabilities
177
Total non-derivatives
38,018
3,451
169
3,620
3,451
169
3,620
3,450
676
4,126
48,193
1,191
49,384
48,193
971
49,164
Derivatives
-
-
-
-
-
-
80
Griffin MininG LiMited
notes to the FinanCial statements
28. subsidiary Companies
At 31 December 2021, Griffin Mining Limited had interests in the share capital of the following principal subsidiary companies.
Name
China Zinc Pty Ltd
China Zinc Ltd
China Zinc (Resources) Ltd
Class of
Share held
Ordinary
Ordinary
Ordinary
Griffin Mining (UK Services) Limited Ordinary
Hebei Hua Ao Mining
Industry Company Ltd*
Panda Resources Ltd
Ordinary
Hebei Sino Anglo Mining
Development Company Ltd*
Proportion of
shares held
Nature of
business
Country of
incorporation
100%
100%
100%
100%
88.8% **
100%
90%
Service company
Australia
Holding and service company
Hong Kong
Holding company
Hong Kong
Service company
England
Base and precious metals
mining and development
Holding company
Mineral exploration
and development
China
England
China
* China Zinc Pty Ltd, China Zinc Ltd, Griffin Mining (UK Services) Ltd and Panda Resources Ltd are directly owned by the
Company. China Zinc Ltd has a 100% interest in China Zinc (Resources) Ltd and 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 provides that the foreign party
(China Zinc Ltd) receives 88.8% of the cash flows and profits of Hebei Hua Ao in accordance with its share in the equity
interest in the joint venture. The term of the joint venture’s business licence expires on 12 October 2037. Under the terms of
an 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 payable of $3,876,000 (2020 $2,934,000) are included in net operating costs rather
than attributable to non-controlling interests. Likewise, the amounts due at 31 December 2021 of $5,638,000 (2020: $4,246,000)
are included in other payables rather than due to non-controlling interests within equity within the Consolidated Statement of
Financial Position.
29. Commitments
At 31 December 2021 the Group had capital commitments of $1,144,000 (31 December 2020: $1,395,000).
30. related parties
Keynes Capital
Keynes Capital, the registered business name of Keynes Investments Pty Limited as trustee for the Keynes Trust, received fees
under a consultancy agreement of $2,737,000 (2020: $2,801,000), for the provision of advisory and support services to Griffin
Mining Limited and its subsidiaries during the year including that of the Chairman Mladen Ninkov. Mladen Ninkov is a director
and employee of Keynes Investments Pty Limited.
Zhangiakou Yuanrun Enterprise Management and Service Centre
During the year $4,279,000 was charged (2020: $3,320,000) for services paid to Zhangjiakou Yuanrun Enterprise Management
and Service Centre, the Group’s joint venture partner in Hebei Hua Ao in connection with local PRC licensing and permitting
requirements and land acquisitions. At 31 December 2021 $5,638,000 (2020: $4,246,000) was due to this company.
31. post balanCe sheet events
At 31 December 2021 there were no adjusting post balance sheet events (2020: none). From 1st January 2022 to March 2022,
operations at Caijiaying were suspended in the run up to and during the Winter and Para Olympic games at Chongli.
81
RepoRt and accounts 2021
82
Griffin MininG LiMited Tailings Facility Three in the background, with the new access road and bridge to Tailings Facility Four under construction
83
RepoRt and accounts 2021 Corporate inFormation
Griffin Mining (UK Services) Ltd
8 Floor, Royal Trust House, 54 Jermyn Street, London, SW1Y 6LX, UK.
office:
Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773
Email: griffin@griffinmining.com
Web site: www.griffinmining.com
Griffin Mining Ltd Registered office: Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda.
China Zinc Pty Ltd office:
Level 9, BGC Centre, 28 The Esplanade, Perth, WA 6000, Australia.
Telephone: + 61(0)8 9321 7143 Facsimile: + 61(0)8 9321 7035
China Zinc Limited office:
18/F, Wai Wah Commercial Centre, 6 Wilmer Street, Sheung Wan, Hong Kong.
Directors:
Mladen Ninkov (Chairman)
Roger Goodwin (Finance Director)
Dean Moore
Linda Naylor
Adam Usdan
Clive Whiley
Company Secretary:
Roger Goodwin
Nominated Adviser
And Broker for AIM:
Panmure Gordon (UK) Limited
One New Change, London, EC4M 9AF, UK.
Joint Broker:
Joh, Berenberg, Gossler & Co. KG
60 Threadneedle Street, London, EC2R 8HP, UK.
Independent Auditors:
PricewaterhouseCoopers LLP
1 Embankment Place, London, WC2N 6RH, UK.
Solicitors:
Bird and Bird
8/F China World Office 1, Jianguomenwai Dajie,
Chao Yang District, Beijing, 10004, PRC.
Bird and Bird LLP
12 Fetter Lane, London, EC4A 1JP
Conyers Dill & Pearman
Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda.
Addleshaw Goddard LLP
Milton Gate, 60 Chiswell Street, London, EC1Y 4AG, UK.
Bankers:
HSBC Bank plc
27-32 Poultry, London EC2P 2BX, UK.
The Hong Kong and Shanghai Banking Corporation Limited
HSBC M ain Building, 1 Queen’s Road, Central, Hong Kong.
HSBC Bank of Bermuda Ltd
6 Front Street, Hamilton, HM11, Bermuda.
UK Registrars
Link Market Services (Jersey) Limited
And Transfer Agents:
12 Castle Street, St Helier, Jersey, JE2 3RT, UK.
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Griffin MininG LiMited