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.

I agree with Andy, if " just wait and see what happens in 4 weeks" was aimed at nothing specific developement wise then it was a bit reckless to say the least imo.

If you ring the company, they are usually very helpful. From my conversations with them over the 3 years I have been a shareholder they have always answered queries fully, which has been backed up by events. I doubt that the chairman's '4 weeks' reference was to do with drilling news as the RC drill has only just arrived in China. Don't forget that the current zinc production underpins a higher sp than the current level, and a change of broker might coincide with a more up-to-date valuation of the existing business, perhaps 45p-50p?
I think that the bigger potential will gradually become apparent as new drilling results come through. In my experience these leak out long before the official RNS. If those are at all supportive of what the chairman believes re their future as a major gold producer then GFM will go ahead vey nicely. Waiting til Sept. is not that long if the news is going to be good.

I wasn't considering bailing out over it, this looks a well run co. with a good captain at the helm, I just wish the captain would choose his words more carefully
sometimes.

I don't think you will get let down supporting GFM's mgt. team. Obviously they have to be careful what they say generally, that is why a phone call to them can be more useful between RNS'. You don't have an email address in your details? Is there a reason?

Sharesure, no particular reason, didn't even notice all that profile stuff.

Interesting to see today's rise in spite of more sells than buys.
dibbles, I had intended to give you a little more background to why I am so confident that the GFM mgt. may be going to produce something quite spectacular later in the year.

Sharesure, let me know if you received ok. Thanks.

dibbles, Yes, and I will send you an email shortly.

Andy, Have sent you an email. Let me know if you do not receive it as I couldn't make it work earlier on.

Sharesure, have you sent mine as I haven't got any thing?

Sharesure,

nothing received yet i'm afraid.

have messaged you my email address.

dibbles, my message facility doesn't seem to work. If you send me your private email that will help.

Sharesure, you have my private email or am I missing something?

Sharesure,

Email received, will do, thanks.

Dibbles, I used the reply facility passed on by moneyam, so if you have rec'd nothing something isn't working. If you let me know via their messaging service your private email address I'll use that.

Got it, will do.

Saw this on advfn last week,
Wirralfinance - 14 jul'05

My broker had a meeting with directors of griffin yesterday and he is very enthusiastic, whispers about a big announcement next week or two about gold being found, its apparently a much bigger find than anticipated and they expect a major rerating of the share price.

"My broker had a meeting with directors of griffin yesterday and he is very enthusiastic, whispers about a big announcement next week or two about gold being found, its apparently a much bigger find than anticipated and they expect a major rerating of the share price. "

Surely that, if it's true, is illegal?

brian,

IMO, correct!

If this rumour were in fact true, I would think the FSA would be interested in how such price sensitive information reached the BB's before the market!

If there is any truth such leakage has done very little to help the SP on the contrary it would appear