Griffin Mining confident despite first quarter production weakness

Griffin Mining updated the market on production at the Caijiaying zinc-gold mine for the March quarter on Thursday, reporting that operations were affected by the Chinese Lunar New Year and Spring Festival holidays.

The AIM-traded firm said they led to disruptions caused by government department shutdowns and travel restrictions for both staff and contractors.

As a result, there was a slowdown in activity, allowing the company to prioritise scheduled maintenance of the mine and processing plant.

Despite the maintenance work resulting in a 10.5% decrease in ore processed compared to the first quarter of 2023, Griffin said it was optimistic about recovering this lost production in subsequent quarters, with a target of around 1.5 million tonnes of ore to be mined and processed in 2024.

Notably, despite the reduced throughput, higher grades of precious metals led to an increase in the production of precious metals concentrate compared to the same period last year, which was particularly beneficial considering the sustained higher gold prices.

In terms of production, gold-in-concentrate increased 527 ounces, or 11.1%, compared to the first quarter of 2023.

Similarly, silver-in-concentrate production rose 3,227 ounces, or 4.7%, over the same period, while lead-in-concentrate production showed growth of 47 tonnes, or 20.4%, on the year.

However, zinc metal concentrate production saw a decline of 2,542 tonnes, or 18.2%, compared to the corresponding period in 2023.

“As expected, the first quarter of 2024 produced subdued results not only because of the Chinese Lunar New Year holidays but also due to the relatively late date this year of the Lunar New Year, which brought the holiday period tangentially into conflict with the week-long annual parliamentary meetings of the National People's Congress in Beijing,” said chairman Mladen Ninkov.

“This caused the shut-down of government departments for a much longer period than normal causing delays to day-to-day approvals needed for daily production, such as explosives deliveries.”

Nevertheless, Ninkov said the lower production numbers were expected, adding that the firm remained on target to produce its budgeted 1.5 million tonnes of throughput this calendar year.

“We continue to look forward to the year ahead with the continuing development of zone II for ore production and the increasing world zinc and gold prices.”

At 1525 BST, Griffin Mining shares were down 1.84% at 126.62p.

Reporting by Josh White for Sharecast.com.