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Company Statement
Griffin Mining Limited was formed in May 1988 in Bermuda as a mining finance company, formerly known as European Mining Finance Ltd. In June 1997, the Company’s shares were admitted to trading on the Alternative Investment Market (“AIM”) of the London Stock Exchange. In October 1997, the Company changed its principal activities to mining and its name to Griffin Mining Limited. In November 2007 Griffin acquired a 50% equity interest in China Zinc Pty Ltd which held a 60% interest in the Hebei Hua Ao Mining Industry Company Limited Chinese joint venture (“Hebei Hua Ao”) which held the mineral exploration rights at Caijiaying in the Hebei Province in Northern China. In March 2008, Griffin acquired the remaining 50% equity stake in China Zinc Pty Ltd, giving Griffin a controlling 60% interest in Hebei Hua Ao.
In June 2005 Griffin completed the construction of the first new foreign owned and operated mine and processing plant in China at Caijiaying, which currently produces around 60,000 tonnes of zinc concentrate per annum together with gold, silver and lead. The mine and processing facilities are being further developed to significantly increase current production rates.
Griffin has been the leader in foreign investment in mining in China having been engaged in developing the Caijiaying zinc gold project since 1997. Caijiaying is located in the Hebei Province, some 200 km north west of Beijing. Griffin's local subsidiary company, Hebei Hua Ao, was the first foreign controlled entity to receive an exploration licence in the Peoples Republic of China and the first to be awarded a new mining licence over a metal deposit in China, as well as being the first to construct a new mine.
THE CAIJIAYING PROJECT BACKGROUND
Mineralisation was first identified at Caijiaying by the Chinese in the late 1960's. In 1994, following the introduction of legislation in China allowing the formation of joint venture entities with foreign parties, Hua-Ao was formed in 1992 and in 1997 Griffin acquired its interest in Hua-Ao.
PARTNERSHIP WITH THE CHINESE
Griffin's Chinese partner in Hua-Ao is the Zhangjiakou Caijiaying Lead Zinc Mining Company, a partnership comprising of the Zhangjiakou City Government, the Hebei Bureau of Geology and Mineral Resources Exploration and the Third Geological Brigade. Griffin maintains good relations with the Chinese authorities at township, county, provincial, and state levels, which has perhaps enabled Griffin to advance its Caijiaying project further than any other foreign controlled mining project in China.
CAIJIAYING DEVELOPMENT AND INVESTMENT
Griffin invested an initial $20m into the development of Caijiaying and the construction of an underground mine and processing facilities to process some 300,000 tonnes of ore per annum ("tpa") to produce some 20,000 tonnes of zinc metal, gold, silver and other associated metals for a minimum of 14 years with the expectation of a considerably longer period of production. Construction of the mine and processing facilities at Caijiaying was completed on time and within budget.
The mine and processing facilities at Caijiaying are being further developed to increase throughput to 750,000 tonnes of ore per annum. Mining and processing rates of the equivalent of 600,000 tonnes of ore per annum have already been achieved.
SPITFIRE OIL
On 27 November 2008, Griffin purchased 16,666,667 ordinary shares in Spitfire Oil Ltd (“Spitfire”), representing a 39.2% interest in the issued share capital of Spitfire, at £0.15 per share for a total cash consideration of £2,500,000 ($4,542,000) from Citadel Equity Fund Ltd (“Citadel”). This purchase enabled Griffin to acquire a strategic stake in a project that meets Griffin’s investment criteria whilst spreading both political and commodity risk. The opportunity to acquire this strategic stake at such a favourable price, being at a 75% discount to the initial public offering price, was considered and approved by Griffin’s independent directors. All of Griffin’s directors have experience in the oil and gas sector. Mr Mladen Ninkov and Mr Roger Goodwin, being directors of both Griffin and Spitfire, provide Griffin with significant influence over Spitfire, requiring Griffin to treat Spitfire as an associated company and thereby recognise its share of Spitfire’s financial results.
Further information on Spitfire Oil Limited may be found in the section on Spitfire Oil and at www.spitfireoil.com.
THE FUTURE
Having significant financial resources at hand and substantial mineral resources, Griffin is well placed to benefit from improved economic conditions.
The new JORC resource confirms the availability of ore for increased future production at Caijiaying. By the autumn of 2010, the upgrade of the processing facilities at Caijiaying, to a capacity of 750,000 tonnes of ore per annum throughput, should be completed. With significant potential for further resources within the current area being mined at Zone III to be defined, the potential for other known areas of mineralisation to be mined and the potential for new mineralisation to be discovered, the likelihood exists for production to be further enhanced at Caijiaying in the future.
Having achieved notable success with Caijiaying, the challenge remains to acquire, develop or discover a new mining project to build on the efficient in-house skills that have been developed within the Company. Griffin remains one of the few mining success stories in China and, having maintained a presence in China for over 12 years, Griffin has gained an excellent reputation in that country. This provides Griffin with a unique entry into China, its culture and power structures. To date, it has proved difficult to find a venture of the quality of Caijiaying in China. This has forced the Company to widen its geographic and commodity focus. Nevertheless, the Company remains dedicated to only acquiring further assets where they provide real value over a long period of time with substantial added value.
Current Operations
CAIJIAYING ZINC-GOLD MINE
Griffin Mining Ltd, through two joint ventures, has a controlling interest in mining and exploration licences over 67 square kilometres in the Caijiaying area of the Hebei Province in the Peoples Republic of China.
Caijiaying is located approximately 200 km north west of Beijing in the Hebei Province in the PRC. The site is easily accessible by sealed road, which runs to the site, has adequate water supplies available from underground sources and is connected to the electricity grid. The Caijiaying area is on the south-east edge of the Mongolian Plateau.
Considerable planning and capital expenditure has been undertaken to further increase production. This work is ongoing with the installation of, inter alia; a new backfill plant, more floatation cells, a new crusher and a third ball mill as well as significant enhancement to site infrastructure. This should enable processing capacity to be increased from approximately 500,000 tonnes of ore per annum to 750,000 tonnes of ore per annum by September 2010.
On-going exploration in the area surrounding the mine at Caijiaying and within Hebei Hua’ Ao’s and Hebei Sino Anglo’s tenement boundary confirms that the area is highly prospective, indicating significant potential for further economic base and precious metals mineralisation. Considerable progress was made in defining a resource at Zone II at Caijiaying some 1.5 kilometres to the south of the mine at Zone III with a maiden Mineral Resource estimate to JORC reporting standards of 5.49 million tonnes of 3.2% zinc, 0.6% lead, 0.3 grams per tonne gold and 24 grams per tonne silver. Further resources are expected to be defined at Zone II, in particular, as underground drilling moves northwards towards Zone III. This should provide additional ore for the processing facilities at Caijiaying.
Geographical Spread
China
Board of Directors and Key Management
| Mladen Ninkov | (Chairman) |
| Roger Goodwin | (Group Finance Director) |
| Dal Brynelsen | (Non executive director) |
| William Mulligan | (Non executive director) |
| Dominic Claridge | (Operations Manager) |
| Wendy Zhang | (Finance Manager) |
| Dr Bo Zhou | (General Manager) |
Company Address6th Floor
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Additional Address/Key ContactRegistered Office |
CapitalAs at 31st March 2010 the share capital of Griffin Mining is as follows:-
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Annual General MeetingJune | Year EndDecember 31 |
Nominated BrokersInvestec Investment Banking | Nominated AdvisorsInvestec Investment Banking |
Major Shareholders
| Blackrock UK Special Situations Fund has an aggregate interest in 9,232,392 shares in the Company representing 5.08% of the issued ordinary shares in the Company. |
| Blackrock Investment Management Ltd has an aggregate interest in 18,302,771 shares in the Company representing 10.08% of the issued ordinary shares in the Company. |
| Majedie Asset Management Ltd has an aggregate interest in 9,520,258 shares in the Company representing 5.19% of the issued ordinary shares in the Company |
Related News
14/07/10 - Zinc, Gold, And Silver Production At Griffin’s Caijiaying Mine Hits Record Levels, And There Should Be More To Come23/03/10 - Griffin Mining Sets A Long Term Production Target At The Caijiaying Zinc-Gold Project Of 1.5 Million Tonnes Per Year
15/12/09 - Griffin Plans To Be Digging Deeper And Richer Ore At Caijiaying Very Shortly
03/06/09 - Griffin Mining Re-Opens The Caijiaying Mine In China, Just In Time To Capitalize On A Strengthening Zinc Price
31/03/09 - Griffin Mining Casts A Predatory Eye Over Ivernia’s Magellan Lead Mine In Australia
Most Recent Statement
16/08/10 - Operational Update16/08/10 - Upgrade Commissioning
09/08/10 - Caijiaying Operations
13/07/10 - Result of AGM
13/07/10 - Production Update
06/05/10 - Final Results