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.!!

An interesting post from the other side this morning :

Minews Story
Date: April 07, 2005

Griffin Mining Takes Blue Riband As First Western Mining Company To Develop A New Mine In China.

The race to be the first western company with a producing mine in China was won by Sino Gold a year or two back, but it took over an existing mine. Griffin Mining deserves the blue riband as it is clearly going to be the first to bring a project right the way through from exploration to production and it will be followed closely by Afcan Mining. The latest news from Griffin is that its Chinese design and engineering consultants and construction managers for the Caijiaying mine and processing plant, the Beijing Engineering Non-Ferrous Institute, have confirmed that, subject to the delivery and installation of a small number of remaining components, the planned date of dry commissioning of the Caijiaying plant will be Monday, the 25th of April, 2005. This is on schedule and within the planned ENFI budget.

It is worth noting that an actual date is given, as this is unusual. Most companies tend to be more vague with comments like at the beginning of the second quarter. The Beijing Engineering Non-Ferrous Institute must be utterly confident in this prediction as the loss of face if there was any delay would be huge. Roger Goodwin, finance director of Griffin, confirms that the last components are actually on site, so there is no real chance of a hitch. Nevertheless, as if to compound the risk another date is given - 15 May 2005 - by which time actual production should start immediately after the curing of the main plant floor, assuming dry commissioning encounters no installation or manufacturing defects. In anticipation of commissioning, zinc ore has already been mined and stockpiled at the surface ready for processing.

The timing could not be better given the strong zinc market In mid March the price hit a 7 year high of US 64.8 cents/lb, but then backed off to US$0.59.6/lb at the end of the month March 30. The rapid run-up in price of 13 per cent this year reflects speculation that inventories will fall further as supply shortfall takes effect. On March 31 LME zinc inventories were down to 574,000 tonnes compared with peaks of 785,000 tonnes in April 2004 and there is now 500,000 tonne supply gap between mine supply and demand with supply declining since peaking in first half 2002 when several new large mines were brought into production. At the same time zinc demand grew at 8.9 per cent between August 2004 to January 2005 with China alone contributing 7 per cent as a result of its 28 per cent increase in zinc consumption in 2004.

The feasibility study back September 2003 was based on an initial throughput of 200,000 tonnes per annum to produce 314,250 tonnes of zinc metal and 108,450 kgs of silver in 586,300 tonnes of concentrates grading 53.6% zinc and 185 g/t silver over the life of the mine. In addition, 39,850 ounces of gold will be produced in bullion. The plan now is to increase throughput up to 500,000 tonnes/year as quickly as possible in order to take advantage of the fact that Griffin receives 100 per cent of the net cash flows arising from the first 3 years of production at the mine and no tax is levied for the first two years. 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.

This feasibility study 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$1,325/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$140 million at the current price. The development work is being carried out by Chinese contractors and virtually all the equipment is sourced from Chinese suppliers. As a result costs are being contained and this is a major point as if bank finance had been sought the company would have been instructed to use western gear and western contractors. A stipulation would also have been placed on the pricing of sales contracts and hedging programmes might have been demanded for silver and gold production.

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 for expansion and exploration results are very encouraging. Earlier this year Griffin also 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.

An interesting note, Dynamite. All very encouraging news.

I'm particularly excited about their ability to extract zinc from the ore at an efficiency far greater than 100%. Not sure how they do that. A few other miners might be interested. ;-)

"...based on an initial throughput of 200,000 tonnes per annum to produce 314,250 tonnes of zinc metal..."

LOL

I see what you mean Starfrog... I hadn't noticed that 200K tonnes to produce 314,250 tonnes of zinc metal plus silver etc. I will look into it.
There must be other references.
Di

I just think they're magic, Dynamite. LOL

Well Griffin are magic but not sure about the figures! LOL

Rising nicely today!
:>)

Interesting article..tks.

Totally OT, guys and gals, but does anyone have any thoughts on SFU? Have restarted the last known thread as it's just come on my radar screen. Take a look at the recent news releases and see what you think. Any comments more than appreciated.

New photo's 5th april on they web site.

Have I missed the point - not much going out in wages by the looks of things !!
This one will come good "my little china"

Oakapples...the point is that Griffin are on time and getting all the equipment in place on time and they are jolly good at keeping the shareholder informed.

Thanks Dynamite good point which I missed - had a very late night watching the "Masters"

Thought...
Wages and overheads paid in the Chinese currency - it's name escapes me!
Rates of pay much lower then in other parts of the world also.

All produce from mine priced in US Dollars....
Chinese currency is 'pegged' against the dollar so not influenced by
market swings which the dollar is.....

So potentially - costs (overheads/wages etc) steady and low, whilst
commodities produced can rise in 'on paper value' (ok they can fall too)
and the worth of the company in terms of its assets (mine production)
can rise in worth without incurring higher costs necessarily,
due to not having as much exposure to the same volatility as other producers elsewhere...

Possibly not making my point very clearly - hey it's monday! - but does
anyone follow my somewhat confusing drift?
I think there could be more upside to this then down.
:>)

Stockbunny - you are not just a pretty face with a nice tail

Oak I thank you but truth is I'm also extremely bad as times at
transferring 'the thought process' to a legible statement! LOL
But I'm glad you could make out the idea amid the waffle!
;>)

Check out eureka mining thread 10x by christmas!

Stockbunny - it's the remninbi (or yuan if you like it simple - yuan it simple, you got it!)

Remninbi is kept artificially low by Chinese gov against US$, so China can export manufactured goods to US. Also, therefore, US$ is high to remninbi, so Zinc sold in US$ makes lots of remninbis.

BUT, most of the mine's production will be used by China, won't it - that's where the demand is and China will not export it only to reimport from elsewhere.

So China has to pay low priced remninbi converted to high priced US$ to buy its own Zinc. The Chinese get no cost advantage.

BUT, GFM make lots of US$ which it has to convert to UK at only about 53p per dollar.

So the net effect of the currency, I believe, is that the profits for shareholders are vulnerable to a weak US$ - just like oil and gold.

However, the chart looks jolly good (who was it got in at 4p!) What was the old up and under in March all about? Even so the steep upward channel from the low at the end of August remains intact. It's gotta go to 50p, hasn't it, on successful commencement of the first smelt (as I beleive it is called in Zinc circles)?

I'm only here 'cos Di taunted me on the SEO thread.

Got no dosh, got no shares.
I'm just a dog that's putting on airs.

woof woof

SD

Well SD in amongst your doggy portfolio you must have a dog or two...You sell a dog and buy GFM and I will sell a dog and buy SEO and we will see which one does better. Woof Woof.

Di :-))))))

Di

Not a bad challenge - let me look at the back of the kennel to see if I can find one!

SD