NEWLY commissioned processing facilities at Griffin Mining’s Caijiaying Zinc-Gold Mine were expected to reach the expanded annual name plate capacity throughput of 1.5 million tonnes of ore during the early part of the September quarter. This capacity was not possible until delivery of a new 750,000 tonne ball mill and the connection of additional grid power.
Underground drilling at Griffin Mining’s Caijiaying mine in Hebei Province.
In the first six months of 2015 Griffin processed 418,950 tonnes of ore through the Caijiaying mill and this was a 2.5% increase on the 408,671 tonnes processed in the six months to June 30, 2014. Metal concentrate production in the period was also higher than in 2014 with 20,081 tonnes of zinc produced, up from 19,147 tonnes; 962 tonnes of lead, up from 609 tonnes; 193,098 ounces of silver, up from 147,901 ounces; and 6274 ounces of gold, up from 5999 ounces. Gold production was a record for the operation.
The company says the increased production was due to better grades as well as better lead and gold recoveries.
Zinc revenue before royalties and resource taxes in the six months to June 30, 2015, was US$26.288 million, up from $24.86 million in 2014, having benefited from higher prices achieved whilst lead and precious metals revenues were $10.799 million, up from $10.222 million, with increased quantities sold but at lower prices.
The cost of sales in the six months was up on the same period in 2014 mainly as a result of increased processing costs with efforts directed at improving precious metal recovery rates. Net operating costs were up with increased regulatory, environmental and social security costs in China.
Funds continue to be repatriated from China to cover central costs whilst leaving sufficient working capital within Hua Ao for the completion of the upgrade of the processing facilities and the further development of the mine. During the period $8.589 million was spent on mine development and plant upgrade work, and $3.875 million was incurred in buying in Griffin shares held in treasury. Bank loans in China of $3.328 million were drawn down, whilst cash balances throughout the group increased by $977,000.
Administrative state issues in China outside the company’s control continue to delay the grant of a new mining licence over the unmined Zone III deeps, Zone II and adjacent areas at Caijiaying. Development of the mine at Zone III continues and the main drive between Zone III and Zone II has almost been completed.
Griffin’s chairman Mladen Ninkov said: “Operationally, the company continues to achieve very good results in light of the current downturn in commodity prices and without the imminent commissioning of new processing facilities.”