Please see S/Tele Share Tips belivies that griffin has had talks with Anglo American & also Ivanho Mines RE: negotations starting @ 50p with management requiring more per share.!!

Charles Stanley note

Mine opening looms

The development of Griffins Caijiaying zinc/gold mine in China is on time and within budget. The mine is expected to be commissioned next April with cash flow a month thereafter. The Company has been stockpiling ore extracted during the current construction phase and production will start immediately on commissioning. Whilst this important stage has progressed satisfactorily but unspectacularly, Griffins share price has trodden water. In the New Year we would expect interest in Caijiaying to revive as production nears and with that Griffins share price should also move ahead.

The Company has been able to both outline material amounts of ore for initial mining and stockpile ore recovered as a result of development work, and this will enable production to run at the fully expanded annualised rate sooner than originally anticipated, with positive implications for initial cash flow.

Aside from the expectation of the mines start-up, in 2005 Griffin will also be drilling a number of highly prospective epithermal gold targets. The budget for this programme is $1 million plus. Mine development expenditure has meant that exploration on Griffins leases has had to be reined back over the last few months. With exploration spending restored, the Company will be firing on all cylinders in 2005.

The zinc price has traded within a fairly narrow range over the last 12 months and is currently towards the top of this range. However, it remains at around half its historic high which was reached in 1989 and just a third of its 1974 inflation adjusted peak. We would look for zinc to continue to improve especially as China has become a net importer of the metal, and is expected to continue to be so for the foreseeable future.

Griffin, which has been active in China longer than any other foreign mining company, continues to be offered high-class mining projects in China by various government and ex government agencies. As Caijiaying nears production it is likely that the Company will acquire another major mining project in the country.

Griffin is one of the few AIM listed miners with a real prospect of operational cash flow in the near term. As April looms we would expect a surge in interest in the shares and this would be materially bolstered if the gold exploration programme is successful.

Estimating pre-tax profits of $0 in 2004, $7,700,000 in 2005 and $28,800,000 in 2006.

Further good news today. Unexpected bonus reserves of zinc have been found. Should see a steady pick up in the price this week. Shame the US aren't trading today. May have to wait untill tomorrow to see the next big jump upwards.

Should be a sound investment for the middle to long term, imo.

Morgan Stanley maintained its 'overweight' stance on Rio Tinto and BHP Billiton.

The US broker raised its forecasts for both stocks and argued that it believes dollar weakness and robust longer-term prospects for China are leading to a period of stronger commodity pricing.

There was demand for Griffin Mining, 2-1/2 pence higher ahead at 31-1/4, in the wake of positive drilling results. Underground drilling results have identified new zones of high-grade zinc ore at the Caijiaying zinc/gold mine in China.

The results exceeded the company's expectations by finding high-grade zinc in zones not included in the original feasibility study ore reserve.

Personally I'm delighted with the moves last week and this week,
although with announcements only coming recently, it does make
you wonder what was driving the share price moves upwards before.
Maybe some lucky hunches paying off....

950,000 T buy at the close.

: January 19, 2005

Griffin Mining On Schedule And Under Budget With Development Of First Western Owned Mine In China.

It is not easy to find much in the way of news to announce when developing a new mine, especially when it is the only advanced project owned at the time. Thus Griffin Mining has had to rely on a few photographs to prove that things are moving along on schedule at its Caijiaying zinc gold operation in China. This is due to be commissioned in the spring of this year and looks like being the first western owned mine to commence production in China since that country opened up to foreign ownership. Unfortunately Roger Goodwin, the finance director, is in China and could not be contacted to confirm that point and Mladen Ninkov, the chairman, was in New York and does not give out his mobile number. Surely all old feuds in Australia are dead and buried.

The feasibility study was completed back in September 2003 and this confirmed that the project would be robust even if the zinc price was well below US$900/tonne. In fact it is now sitting at US$1,225/tonne so not many worries on that score. The leverage to the zinc price is an interesting one as the cumulative after tax cash flow, post capital repayment, rises from US$67.2 million at a US$900/tonne zinc price to US$104.4 million at US$1,100/tonne, and onwards and upwards to over US$120 million at the current price. Another point worth noting is that the feasibility study applied only to zone 111 at Caijiaying which is a small 1.5 sq kms part of the overall package of 67 sq kms so there is still plenty of potential.

The 60:40 joint venture with Griffins Chinese partners is unique in that Griffin receives 100 per cent of the net cash flows arising from the first 3 years of production at the mine. After three years, of course, the net cash flows will revert back to reflect the 60/40 ownership structure, but in the meantime Griffin will be cash positive from day one as it did not have to take on any development loans. Banks being banks they took so long to make any decision about this first western project in China that Griffin went out and raised the money through brokers Ocean Equities.

The company has just announced that further systematic underground stope -definition drilling has identified new zones of high grade zinc ore which were not included in the original feasibility study ore reserve. These will clearly add further value to the project and resulted from the need to define ore which would be mined first. The drafting of the announcement is a bit confusing, but it appears that it is the Fu Long Lode that was missing from the ore reserve above the 1400 level and this has been divided into three parts, North Upper, Central Upper and South Upper. Just to give a flavour, there was a 10.15 metre intersection in the Central Upper Fu Long Lode which graded 16.65% zinc and 83.6 g/t silver; in the North Upper Griffin intersected 10.48 metres grading 18% zinc and 56.47 g/t silver; and in the South Upper 12.98 metres grading a more modest 8.74% zinc and 7.14 g/t silver.

Stope development has started ahead of schedule and full production from the Fu Long lodes will be possible once the main mine decline links up with the 1400 level as it is expected to do shortly. In the meantime a second lode system, Jin Long, has been accessed for development by a sub-incline from the 1400 level and drilling is taking place on a third lode. As far as the recovery plant is concerned everything is in place bar the gold process equipment expected at the end of this month, and the main power line supply has been contracted. The Griffin team has been working closely with the Chinese engineering institute ENFI and Chinese expertise in designing and installing their own equipment has been used to the full.

Surplus cash flow from the mine will be used on exploration and IP surveys have been conducted within the original exploration and mining licence areas, but away from the mine itself. Then there is another JV with the same Chinese partners over a surrounding area which contains two large epithermal areas of alteration containing known gold and silver occurrences . A ground aeromagnetic survey has been carried out to define targets for drilling this summer. Its been a tough ride for the company, but the end of the beginning is now in sight.

A good post aldwickk (#22 - read it if you haven't already). Very encouraging news. I am of the opinion that Griffin are now well placed to receive further mining contracts in China after demonstrating a good working relationship and coming in ahead of time and under budget.

A very key point in your post (and one that should not be underestimated) is the fact that Griffin raised the development money without the aid of the banks and therefore will be

*** CASH POSITIVE FROM DAY ONE. ***

(Apologies for 'shouting' but this is extremely good news, imo).

Great stuff. Go Griffin. :>)

Hey feel free to shout from the roof-tops Prince Froggie
this one looks a goodie!!! :>)

Are you saying the others are crooks LOL

LOL aldwickk!
:>)

Nice show of interest this morning and moving into blue. Got on board at 29.25p so initial costs already covered

Got a bit worried a couple of days back when there seemed to be
some profit taking going on by the drop in the price - don't
you just hate it when people jump the gun, they could wait for
a really decent rise first before pulling their cash out.

Agreed Stockbunny - they could at least have the manners to wait for our OK !!
Got into BED (pun intended) just recently doing very nicely until greed struck to-day. May buy more now as came out well on Working Lunch recently.

This was fetured in S/tele on there tips page today saying 'Was fetured in 2002
The No of shares sold in 2002@13.5p & was still testing deposits & again @ 25p
in may 2004when it started to build the 'Mine'near cap of China since then traded in a narrow band but the opening of the mine Shares should begin to motor
Per tax profit should be$7.7m this year & 28m in 2006 Comments are to 'Buy'

Are those figures current? I thought I read those projections from some time ago, since when the company has upgraded its finds and the zinc price has improved. Of extra interest are the drilling results expected in the next two months on new areas and those to see if existing finds are continuous between areas plus the results of the gold assay which is due soon. Unless you are a geologist understanding their last press release is not easy.

Up 5% today so far and just under 2M shares traded.
:>)

Now over 3M traded and up 7%
:>)

Hi' Bunny,

This is my 2nd largest holding, news of mine production startup should be soon.

They were saying in Spring previously, just curious as
to why the sudden rise today? Oh well wont compain!!
:>)