Griffin Mining

GFM is now within 10 days of commencing production and as it has stock piled zinc ore during the mine construction period the company should be in a position to forecast with confidence that it will comfortably beat not only the brokers current forecast but also the later extrapolated projections prepared by me to reflect the prevailing higher zinc price. Those projections were for earnings of 3.33p this year and 12.1p for 2006.
The income will also facilitate a more extensive drilling and exploration programme, not just for more zinc, but also gold so there is scope for a steady and positive news flow after the 15 May production start date and the publication of their results around that time.
The shares have been overlooked by the market as the current price does not reflect the transition from pure exploration company to production/income producing status.

Andy, I accept that Shares cannot cover everything. Where I take issue with them is how they seem to get locked on to some, mentioning those time after time, and ignore others. Agree with you re GFM's PR team/consultants and their Brokers ineffectiveness. I guess the company must be considering making some changes some time soon if that doesn't improve.
The IC results bit of last week was inaccurate over their comment about GFM's mining licence; what I find odd is that they made that mistake but apparently they are to publish a correction tomorrow. GFM's price has weakened this week although that may have more to do with hedge fund activities than any lack of press comment.
I'm happy to lock these away and wait for them to start making their profits, unless the chairman makes any comments at the AGM on the 10th June which change my mind.

Sharesure - I hope you're not suggesting any shenanigans amongst Shares journos - As the whole world and his dog knows financial jounalists are as honest as the day is long! As, of course, are all those involved in 'The City'.

Definitely not! Just some times it gets tough keeping the faith.

Sharesure,

I guess they are like us in that we focus on certain companies/sectors, as there are simply too many to take in otherwise.

I also think they are part of the financial 'industry', and will of course have friends in PR companies and brokers, so may be more aware of certain companies than others.

The IC printed an error (not too uncommon in the media IMHO) and after a shareholder pointed it out, apparently they will print a correction, which seems reasonable to me.

I once pointed out an error to Shares, and they didn't print a correction!

If there is value in Griffin, (and I think there is), it will out, regardless of press comment, or even the lack of it, IMO.

Andy, Agree with your comments. I expect GFM will likely come alive when they start drilling more areas and find more reserves, as the news that they will be actually producing zinc and gold as of next week seems to have been taken for granted. As far as value is concerned, if zinc stays at the current price level or they manage to sell at even better rates on the local market then the PE will in a very short time, (like 12 months?) be under 5, possibly as low as 3, which can't be bad. But until then......

Sharesure,

Well they are up 0.5p already today!

I was reading the 2004 annual report last night, and it does look good, I have to admit.

Andy, If the hedge fund shake-out has now run its course that should enable GFM to steadily improve; it just doesn't look like this share is going to achieve its proper level overnight unless, of course, there is a bid; despite the rumours some time ago that doesn't look like its just round the corner, does it?
Are you going to the AGM on the 10th? I know some of the other shareholders who are going; this year should be better attended and hopefully the company will have some more to say about the increased production target and drilling programme.

How is any exploration upside to be shared betweeen GFM and the Chinese Government?
The present value of the after tax profits stream depends on among other things the exchange rate. Can anyone enlighten me on these 2 matters? If the Chinese realign their ccy, would it not massively reduce GFM's profits? Thanks.

nobull, The first 3 years proceeds are 100% to GFM; after that the Chiese kick in for 40%, so it really is an incentive for GFM to maximise revenue asap rather than slowly build up. As for how they deal with future finds, ie do they get a further 3 years at 100% on those finds, that is a question I want to get answered at the AGM.
As far as currency appreciation, if the yuan is revalued, 5%?, then that would lower the repatriated funds. As all their costs should be in local currency, and if they sell locally, which seems likely as China is a net importer of zinc, then it shouldn't affect the costs/revenues of the actual mine, in my opinion.
Interested if anyone has any different thoughts on this.

Thanks sharesure for your answer. By exploration upside I meant anything that is as yet undiscovered. I see GFM has exploration licences that cover a bigger area than that for which they have a mining licence for. The best scenario from GFM's point of view is a finders keepers one (they keep everything they find in proportion to the shareholdings held by GFM and its local, Chinese partner in the joint venture subsidiary that owns the licences. The worst is GFM is paid a fixed salary or fixed rate of return regardless of what it finds. I am a bit wary about investing in this, although I sure would like to ask Mr. Ninkov a few Qs at the AGM. Would not the latter scenario be possible by setting adverse terms for the mining licence after all the exploration expenditure has been incurred? I have no view on whether the current share price at 29.5p or thereabouts adequately discounts the expected cash flows from the production figures they want to achieve as quickly as poss. (for the reason you outlined). I am interested in whether there really is substantial exploration upside in this stock or not. The geology sounds good, but China needs the money for its people too much to be giving it all away to GFM, does it not? I haven't a clue about the outlook for zinc other than it hasn't done much in sterling terms. The gains in $ on the LME zinc contract don't amount to much for UK based investors?

Nobull, The question you raise is a good one; if you aren't able to get to the AGM on the 10th I'll ask it for you. Up 'til now Mladin Ninkov/Roger Goodwin have been good at getting the right terms for GFM. They have the incentive of some quite highly priced options to ensure they don't miss out on opportunities.
If you cannot wait til the 10th Roger Goodwin, FD, is usually forthcoming if you call him.

Now Griffin really begins!!!;

Griffin Mining Ld
31 May 2005

Griffin Mining Limited



31 MAY 2005



DRY COMMISSIONING SUCCESSFULLY COMPLETED

&

COMMENCEMENT OF WET COMMISSIONING

OF CAIJIAYING PROCESSING PLANT


Griffin Mining Limited ('Griffin or the 'Company') is extraordinarily pleased to
announce that dry commissioning of the Caijiaying processing plant has been
successfully completed and wet commissioning has commenced with initial
production of zinc concentrate expected in mid June.



Mladen Ninkov, Griffin's Chairman, commented on these developments as follows:


'The Company has fulfilled its promise to its shareholders and the market by
commissioning, what the Company believes, is the first new foreign owned and
operated mine to be constructed in the Peoples Republic of China in the modern
era. This was achieved on time and on budget. The scale of this achievement
cannot be exaggerated. I congratulate all those who contributed to this
outstanding success including the long term shareholders, financial advisors,
consultants, contractors, government authorities, management and the directors.'





Further information



Mladen Ninkov - Chairman Telephone: +44(0) 20 7629 7772

Roger Goodwin - Finance Director

Griffin Mining Limited



Philip Davies Telephone: +44 (0) 20 7953 2000

Charles Stanley & Company Limited



Hugo de Salis Telephone: +44 (0) 20 7242 4477

St Brides Media & Finance Ltd



Griffin Mining Limited's shares are quoted on the Alternative Investment Market
(AIM) of the London Stock Exchange (symbol GFM).

Further information on Griffin Mining Ltd is available on the Company's web
site:
www.griffinmining.com



This information is provided by RNS
The company news service from the London Stock Exchange

Dynamite, Let's hope so. They deserve success. Just hope they don't encounter the attention of shorters trying to upset what should be a good run from now on. Are you going to the AGM on the 10th June?

Excellent news, everything on track ( I think one week delay is assumed after todays RNS?
I follow the stock on ADVFN, this is quite a decent thread too and doesnt suffer from the spate of non-GFM related posts on ADVFN of recent times.
Hedge Funds - no way of knowing if GFM were affected by them. Whatever, I have been buying over the last few weeks. In the 2nd Quarter china's growth remains over 9% for the year. ZINC remains a growth story and reserves continue to reduce.
IF! the stock has been attacked by a hedge fund, I believe that recent run on AIM stocks has been completed. The FT last week also said as much and the Hedge Funds had found equilibrium. IF so, and IF GFM were affected, you are looking at a deppressed price for a solid stock. all IMO of course and PS I see absolutely no enidence of Simon K ( Evel K) shorting GFM, Sinon's way is usually to announce his presence so you'd probably know it. HE's never posted.
H.

Hectorp,
That's reassuring re shorters; my concern was a repeat of last year's Frankfurt stock exchange debacle when the sp took a big hit. I would buy more in GFM but apart from being reasonably well represented in it I need to sell other things first.
GFM had confirmed to me there had been a one week delay for minor snagging issues; that is inevitable. What the company now seriously needs is a reliable broker update and, if possible, a few more new drilling successes; I guess the latter will come over the summer when they get the results from their newly acquired rigs which will be doing more work on the gold area + trying to establish with certainty the link between the various zones, partic. 2 & 3.
I am hoping that the AGM will be the time for a great deal more information on production targets + drilling programme.

Sharesure...I wish I could go to the AGM but never mind...I am sure it will be good. Griffin have consistently met all their targets and are set to make a lot of dosh. The agm should hold furtehr good news me thinks.
Di

Dynamite, I'll post anything I find out which is new from the AGM.

Thanks SS

This is weird. Not one buy recorded on the trade record, all sells bar one not known; and the sp rises a fraction. What is happening?

Weird indeed Sharesure - Normally you would feel that the MMs are collecting but the spread is not large enough to put off ordinary buyers. Any educated views out there ?