Griffin Mining - golden future! http://www.basemetals.com/

GFM deserves a new thread after todays AGM. For the first time the venue was packed with shareholders, a tribute to the interest and support the company has for what the Board has achieved. For those unable to be at the meeting here are some of the points I noted which may interest folk on this BB.

Production: dry and wet testing now completed and zinc concentrate comes through the smelter next week. Zinc price on the LME is currently $1300/ton. GFM is being offered $1700/ton at the mine gate. This premium reflects the demand and difficulty local industry has in sourcing this basic metal ( As an aside the chairman reported that zinc is not easily and efficiently extracted as a recycled metal so newly mined zinc is always required). Cost of production is $595/ton ($700/ton if all depreciation costs are included). Labour costs are $1000/worker pa cf an Aussie underground worker of $130,000/worker pa. Apparently the 20m.pa worker migration from agricultural to industrial jobs means that there are queues of applicants wanting jobs at the mine; wage inflation is not an issue. 240+ employees on site to run the mine on a 24/7 basis.
Production can be increased w/o further investment for a throughput of 400,000 tons of ore pa; An increase to 500,000tons pa would require further investment of between $1m and $2m . All plant has been purposely over-engineered to ensure capacity can rise reliably and with back-up facilities (eg 3 boilers, 2 of which are back-up)
H&S is to world stds., setting an example to the rest of the Chinese mining industry which has a poor record currently because of the number of small private mines.

Reserves: 14.5years supply on current zone rising to 25 years in zone 3. Chairman showed an independent report which believes that the closure of many existing zinc mines is now producing a supply gap which will continue to improve the zinc price cycle to year 2012.

Profits: No problems known or foreseen to the repatriation of profits. However the chairman stated that the profits might achieve more for shareholders if the company uses these for further exploration and possibly buying back the companys shares. The latter move might help resolve the current shorting problem where it is thought that between 6 or 7 million shares are currently being shorted. This move could have a highly geared effect on increasing the share price and help deter the shorters/stock bashers from further activity.

Exploration: Chairman says company will be drilling a further 18,000m over the coming summer months and in his personal view he expects the company to steadily move towards becoming a gold mining concern, with some of the profits from the zinc smelting funding that work. An RC rig which costs 33% of the cost of a diamond drilling rig has been brought on to site.
Future exploration areas always being looked at + changes in Chinese Ministry of Land & Resources policy towards funding means that GFM will likely be offered many more prime government held assets in the near future.

Personal view is that GFM is a well and responsibly run mining company which is now likely to really grab a lot more attention as the profits start to flow as of next week. I am sure others on this BB at the meeting can fill the gaps where I have missed anything.

So would I. Very puzzed at zinc price dropping given all the comment about a supply/demand gap. Also disappointing that the price seems so ready to soften. Istill remain convinced that the four week news might include a broker change. It could also be coupled with a small buy back of shares once they are certain that the processing plant is continuing reliably. There is still a massive short position that sometime has to be filled.

Sharesure,

But I don't know why he would announce "news" at the AGM if it's only a change of broker!

I don't see a change of broker as being value enhancing, they put their clients in, and the previous one probably takes his clients out, (more or less) , so not a massive change there.

Personally I would be amazed if they started to buy back shares at this juncture, a new project is far more likely IMHO.

Zinc price falling somewhat from the peak!

not only that but would the gold price come into that with the share price falling
there are several ones that have dropped including african eagle & african gold to name two

Gold seems to have finished the day steady anyway, although a much
bigger producer RRS has been up today and considering the recent fall
in the gold price hasn't fallen as much as I thought it would.
Quite possible the smaller players are being hit harder though.

Sharesure,Andy

One or two on advn bb have suggested that Ninkov's "in 4 weeks" comment might not have been aimed at any specific event coming but just a possible re-rating.
As you were both at the AGM I wondered what your views on it are?

I see we are looking for a new site manager.
I wonder if Stanley Rogers left or have they got another project for him?

dibbles,

Well I had the impression he had a certain event in mind when he made the comment, but of course I could have read it wrongly.

He made the comment in a positive way, and I gained the distinct impression there was a reason for him making it.

Andy,

I wasn't there but that's certainly how reports on different bb's made it sound, thanks.

If our site manager Stanley Rogers had left the company would GFM have to announce it?
If he hasn't left the company, as we are advertising for a new site manager for the current operation, I'm going to stick my neck out and say he's being moved to a new project and that is the 4 weeks news.

dibbles,

You may well be right, I would think a new project is a good guess at the "news" he mentioned as being forthcoming.

If I have time I will ring and ask them if he's left the company or not.

They wouldn't have to RNS isuch a change IMHO, as it's not really price sensitive news.

Quite a few "early baths" this morning - why ? - is there news elsewhere

8th July 2005

EXERCISE OF WARRANTS


Griffin Mining Limited ('Griffin' or the 'Company') has received notices
exercising warrants over 4,925,000 new ordinary shares in Griffin at an exercise
price of 0.20 per share for net proceeds to the Company of 985,000. These
warrants were granted as part of an equity placing in August 2003.



Application has today been made for the new ordinary shares issued on the
exercise of the aforementioned warrants to be admitted to trading on AIM, which
is expected to occur on 14th July 2005. Following the issue of these new
ordinary shares, there will be 183,252,731 Griffin ordinary shares in issue.

Not quite the news we were hoping for.
Maybe next week.

Can anyone confirm that RAB are exercising these warrants .

The price is drifting today, 1p down now.

Still holding 35p, hopefully this is our new support level before pushing on.

Been out of circulation for a few days. re the query about the AGM and news, I'm certain that a change of site mgr. was not it and I doubt that that is that significant. I would more expect a broker/PR change, share buy back proposal or some new assets to explore. Guess 4 weeks may stretch a little.

Did someone say they where going to ask GFM about the change of site mgr [ as he been moved to another GFM site ] or left the company.

Sharesure,

Good to have you back, I wasn't suggesting the site manager was the news or that he had left just that they were advertising for a new one.
If the news(assuming there is any news) were to do with a new project, Stan Rogers might have been moved to assess it.
Having said that it may be as someone else pointed out that they just want another site manager on board to cover around the clock.
Aldwickk, I think it was Andy that said he might email them.

To answer the query re the search for a new mine mgr.; apparently the start-up mgr. was expected to want to move on once the mine was in production. The search for a replacement has produced a good supply of high calibre candidates. Apparently production is going to plan and the extensive RC drilling programme to delineate the zinc between zones and to explore more thoroughly the gold area is likely to produce newsflow in the early autumn once the test areas have been independently assayed. GFM seem quietly confident that they are on to something good but do not want to draw conclusions before they can be sure that what they have found so far is not just an isolated result. Makes Sept./Oct. potentially very interesting months. The news in 4 weeks comment from the AGM is in my view much more likely to be broker update related, but that should advance sp expectations.