Griffin Mining AIM:GFM, the AIM-listed mining company has had a strong year, having recently released its production figures for the year ending December 2023, reporting record production from its flagship multi-asset 1.5mtpa Caijiaying Mine in China.
The Caijiaying Mine is an operating zinc, gold, silver, and lead mine, with attached processing plant, camp and supporting facilities, located about 150 miles north-west of Beijing in the Hebei Province. The mine is operated through Chinese miner, Hebei Hua Ao Mining Industry Company Limited, which Griffin has owned 88.8% of since 1997 though its Hong Kong subsidiary China Zinc.
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It’s been a long road for Griffin and Hebei Hua Ao, having identified the mine, undertaken initial exploration, proved the resource, constructed the mine and supporting facilities and taken the mine into production in 2005, and cost Griffin around GBP300m over 25-years.
Griffin initially debuted on AIM in 1997 under the name European Mining Finance Limited, and changed its name a year later. In its latest production results to end-December 2023, Griffin reported that it had mined 419,732 tonnes of ore, 83.7% up year-on-year and processed 408,029 tonnes of ore, up 121.7% on the 184,045 tonnes mined over the same periond to December 2022.
Increased production matches improved pricing
The strong fourth quarter really buoyed Griffin’s annual results, with Griffin hitting the nameplate 1.5mtpa annual production target, both in terms of ore mined and ore processed. Of this figure – up 76.6% y-o-y in annual ore production and up 82.1% y-o-y in annual processing – the London-headquartered mining company produced 56,933 tonnes of zinc, 1,546 tonnes of lead, 17,052 ounces of gold and 314,667oz of silver. Across all its metals, apart from zinc, pricing improved in 2023.
Mladen Ninkov, Griffin’s chairman, said in a statement on Thursday (18th January): “Spectacular. That is the only word that can adequately describe what has been achieved by the management and staff of the company in 2023 […] From a company that has only ever raised net capital of under USD30m and no debt in its 26-year history, to now have a world class, modern, underground mine, producing over 1.5 million tonnes of ore per year is an extraordinary and, frankly, unheard of, achievement in the mining industry. Congratulations to everyone, living and departed, who made this possible and refused to be governed by the accepted wisdom that this could not be accomplished in China.”
Despite China being a vast consumer of commodities – it is reckoned that China has accounted for half of all global demand for minerals over the last 30 years – and has been very energetic in seeking, investing in and acquiring mineral resources in developed nations; UK companies haven’t historically invested in mining operations in the People’s Republic itself. Which is strange, given that China’s home-grown mining industry is enormous, being the world’s largest producer – often by a substantial margin – of a plethora of mineral commodities, including aluminium, cement, coal, graphite, iron and steel, lead, magnesium, rare earths, and zinc.
Griffin Mining bucking the trend
Griffin has bucked the trend, and although China imports vast amounts of commodities, it is ever hungry and consumes most of the minerals it produces in China, domestically. In its last set of published results, to end-June 2023 Griffin reported revenues of USD69.5m (GBP54.8m) up more than 100% year-on-year, with gross profit of USD21.7m (GBP17.1m). Basic earnings per share was US2.77 cents and the company saw a cash inflow from operations of USD21.4m, compared to USD4.1m flowing the other way a year previously.
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The company has been good for its shareholders in 2023, having kicked off a share buy-back programme in February to: “[…] return excess monies not required to meet financial and working capital requirements to shareholders,” which was renewed in September.
Griffin Mining Share Price
Griffin’s shares are up 13.4% to 93.25p (as at close of 18th January) with the shares ranging between 72p and 100p over a 52-week period. The company has a market cap of GBP185.3m
The company, by its own admission, has had a spectacular year, but will it be able to keep up the same momentum? It’s definitely ‘one to watch’.
