GRIFFIN Mining expects operations to return to normal during the second half of 2016 at the Caijiaying precious and base metals mine. This follows a fatality at the mine in October 2015 which resulted in operations being shut down for five months.

An aerial view of the area around the Caijiaying mine in Hebei Province indicating the various facilities.

Griffin chairman Mladen Ninkov said the shutdown that followed the death of a contractor not only stopped mining, processing, production, revenues and profits, but also prevented underground clean-up activities and capital development to be undertaken in the downtime.

“The effects of the shutdown were being felt, both operationally and financially, until June this year. Barring any further extraneous events, the second half of 2016 is expected to return to normality and, with higher commodity prices, the company is confident of a very acceptable second half year period,” he said in Griffins half year statement.

Revenues and profits were severely impacted by the suspension of mining until January 22, with the ramp-up further impacted by the disruption caused by the Chinese New Year holidays in February. Relatively low commodity prices in the March quarter also took their toll.

The company said these issues resulted in a lack of ore and low grade ore to process in the first quarter. The June quarter saw an increase in the amount of ore mined and processed, which together with rising commodity prices led to a return to profitability.

With 13.5% less ore hauled to surface, throughput of 365,337 tonnes of ore in the six months to June 30 at Caijiaying was down 12.8% on the 418,950 tonnes achieved in the six months to June 30, 2015. Metal in concentrate production during the period also declined. There were 13,420 tonnes of zinc produced, down from 20,081 in the same period of 2015; 705 tonnes of lead, down from 962 tonnes; 120,953 ounces of silver, down from 193,098 ounces; and 3553 ounces of gold produced, down from 6274 ounces.

Administrative state issues in China outside Griffin’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. During the six months to June 30 $5.62 million was expended on mine development and plant upgrade work.

Mladen Ninkov said, “The company continues to progress the Mining Licence application and remains hopeful of a successful conclusion to this matter.”