Griffin Mining Reports Record Results, Secures Licence to 2054, and Advances Zone II

There is one wrinkle worth noting. The current business licence of Hebei Hua Ao expires in 2037, and the joint venture needs to be converted into a limited liability company with an extended business licence to at least 2054. Griffin says it is undertaking that process and concluded there is no impairment issue, but investors should keep an eye on that legal conversion because it is not just admin – it is part of matching the corporate structure to the mine licence.

Zone II first production blast finally happened – and that should support future growth

The second big takeaway is that Zone II has finally reached first production blast. Shareholders have been waiting a while for that, and the chairman more or less admits as much.

Why does it matter? Because Zone II is not a side project. It is a major new mining area at Caijiaying, and the company says ore is now expected to be mined from Zone II for the duration of the current mining licence to 2054.

The delay was not trivial. Griffin says Chinese regulations changed during development, requiring the whole underground mine and infrastructure for the total known resource in Zone II to be built out, rather than developing one level at a time. That led to 19.4 kilometres of underground drives and ancillary workings, plus 625 metres of ventilation shafts.

My view is simple: the pain has been real, but the payoff could now start to show. Once a miner gets through a long, capital-heavy development phase, investors want to see it convert into higher throughput, better mine flexibility and stronger cash generation.

Griffin Mining production in 2025: lower throughput, weaker zinc, stronger silver

The operational picture was mixed. Throughput – the amount of ore processed – fell 4.9% to 1,111,658 tonnes, after the slow restart from the 2024 fatality and later restrictions on explosives supply imposed by Chinese authorities.

That had a knock-on effect on production, although not uniformly across the metals mix.

• Zinc metal in concentrate production fell 7.8% to 36,346 tonnes
• Gold in concentrate production fell 6.5% to 15,096 ounces
• Silver in concentrate production rose 23.6% to 340,653 ounces
• Lead in concentrate production rose 25.2% to 1,621 tonnes

The revenue bridge explains the year nicely. Zinc concentrate sales fell to $79,721,000 from $96,126,000, but lead and precious metals concentrate sales rose to $64,614,000 from $46,473,000.

Gold was especially helpful on price. The average price received per ounce of gold jumped to $3,274 from $2,228, while silver improved to $32.0 per ounce from $24.3. Zinc, by contrast, went the wrong way, with the average price received per tonne falling to $2,211 from $2,414.

So yes, production softness is a negative. But in 2025 Griffin had a better sales mix and stronger precious metal pricing, which more than offset the weaker zinc contribution.

Costs, cash flow and share buybacks: better efficiency, but heavy spending continues

There was also genuine progress on costs. Cost of sales fell by $6,704,000 to $77,173,000, and production costs per tonne of ore processed improved to $69.4 from $71.7.

That said, it was not perfect across the board. Mining costs rose 15.0% to $29,886,000, and unit mining costs increased to $26.8 per tonne mined from $22.6, reflecting fixed mine service costs and extra drilling and geology work ahead of mining. Haulage and processing were better behaved.

Operating cash flow was much stronger at $53,927,000, up from $19,582,000. That is a very healthy number and gives the results real substance.

However, Griffin also spent heavily. Capital expenditure, net of disposals, was $36,116,000, while $20,351,000 was spent on buying back shares. After all of that, cash ended the year at $47,547,000, down from $48,758,000.

I actually like that balance. The company is still investing heavily in the mine, yet it has enough confidence to return capital via buybacks. It is also worth noting that the lower share count helped basic earnings per share rise to 12.1 cents from 6.08 cents.

High-grade gold drilling could add another leg to the Griffin Mining story

Beyond the annual numbers, the exploration comments are encouraging. Griffin says drilling below the existing development at Caijiaying during 2025 and 2026 continued to deliver high-grade gold intercepts.

The key names here are the Yuan Long orebody and the Fu Long feeder system. The company says Yuan Long remains open to the south and at depth, with further drilling and underground development planned, while ongoing work is materially expanding contained gold in the Yuan Long system.

That is potentially important because Griffin is already getting strong support from gold prices. If it can also grow gold resources and bring more high-grade material into the mine plan, that could improve both margins and market interest.

What Griffin Mining investors should watch in 2026

The company’s outlook for 2026 is positive, with an expected return to 1.5 million tonnes per annum of production during the year and new mining areas coming online. If that happens, Griffin could combine better volumes with the operational benefits of all that Zone II investment.

For me, the bull case is straightforward: a much longer mine life, Zone II finally moving into production, strong cash generation, solid buybacks and upside from high-grade gold drilling. That is a better setup than the market had a year ago.

The risks are just as clear. Griffin is still a single-mine story in China, it remains exposed to regulatory disruption such as explosives restrictions, and investors should keep watching the business licence conversion process. No dividend was disclosed in this announcement, so buybacks remain the main route for capital returns.

Overall, this looks like a good set of results with one standout strategic win. The 2025 numbers were strong, but the bigger point is that Griffin now appears better placed to turn years of development work into longer-life production and, potentially, higher-value ounces.