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.

Can the new plant be used for Gold as well as Zinc ?

Andy, he hasn't posted again since.
He did get attacked by some after the first post but in his defence one or two regulars did say that they had always found him to be honest and reliable.

aldwickk, Yes, it was designed that way, because even the zinc bearing ore they are putting through now has some gold in it which they tap off as a by-product. I don't think the gms./tonne are significant with the ore from this part of the licence area, (0.75gm-1gm. /tonne?), although apparently even that is regarded as commercially worthwhile on its own in most parts of the world. I agree with the other comments here that mining has such a history of inflated claims (Mark Twain's "beside every hole in the ground stands a liar!" comes to mind) the chairman's instinct needs to be treated as just that until more extensive drilling proves him right. It boils down to backing his hunch for the sp to advance strongly. The current sp does not in my view reflect any backing of his instinct although he has had a good track record of being right so far.

dibbles,

Ok. if his broker has become aware of his comments being posted all over Bb's, he may not be too impresessed!

I am sure he's probably reliable, but not all broker originated rumours turn out to be true, they can be victims of market "gossip" ust like the rest of us.



Sharesure,

I know the mine can process gold as a by product of the zinc production, but can it process gold ore?

I'm not sure about that, I will try and find out.

Zinc concentrate stock pile at Caijiaying ready for sale.

aldwick,

thanks, a site for sore eyes.

price is up 0.5p, but the volume is almost non existent today.

Nice start to the day. Think all the questions yesterday re gold throughput will get answered when a new broker is appointed. (Quite soon?). Suspect existing plant can handle by-product gold but if a much more extensive and richer deposit is confirmed there may be a need for additional processing facilities. I think that GFM mgt's caution about being rushed into saying too much too early is in character with their reputation for being a team that comments and then delivers on firm prospects rather than hyping. Given the steady progress over the last year, waiting til Sept?early Oct. seems worthwhile.
Shares look likely to anticipate that time by strengthening between now and that time.

Sharesure,

Apparently GFM is a "BUY" recommendation in Shares Mag!

Someone did read your emails after all.

And that would account for the early flourish then, now retracing.

Andy, Thanks. What took them sooooo looooooooooooong! Maybe they have a new mining commentator? I can't download the magazine this morning for some reason.

Andy, Thanks. What took them sooooo looooooooooooong! Maybe they have a new mining commentator? I can't download the magazine this morning for some reason.

Andy, Thanks. What took them sooooo looooooooooooong! Maybe they have a new mining commentator? I can't download the magazine this morning for some reason.

Andy, Thanks. What took them sooooo looooooooooooong! Maybe they have a new mining commentator? I can't download the magazine this morning for some reason.

Sharesure,

It's on page 16, a whole page to Griffin!

I have downloaded it ok about five minutes ago.(though not received the hard copy yet!)

Andy - Any chance you could copy page 16 to this BB - it might do us all a power of good. What do my learned fellow investors make of a change of Broker ?

oakapples142,

Well not much personally, we may see some buys from the new broker putting clients in, but we'll probably see some sells as the ex broker takes his clients out!, IMO.

What needs to improve is the PR, and maybe the new broker is the reason that GFM have finally apeared in the Shares Mag pages.

Unable to co copy here as they may claim breach of copyright.

========================================================

Griffin Mining Ld
21 July 2005

21st July 2005

Appointment of Nominated Adviser and Broker


Griffin Mining Limited ('Griffin' or the 'Company') has today appointed Collins
Stewart Limited of 88 Wood Street, London EC2V 7QR as the Company's Nominated
Adviser and Broker for the purposes of the quotation of Griffin's ordinary
shares on the Alternative Investment Market of the London Stock Exchange.



The Company would like to extends its sincerest gratitude to the corporate and
institutional staff at Charles Stanley & Company Limited, the Company's previous
Nominated Adviser and Broker, who assisted the company so diligently in its
early development.





Further information

Mladen Ninkov - Chairman Telephone: +44 (0) 20 7629 7772
Roger Goodwin - Finance Director
Griffin Mining Limited

Andrew Smith/Martin Eales Telephone:+44 (0) 20 7523 8350
Collins Stewart 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).

The Company's news releases are 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

Andy - Thanks for that - I felt that my cheek would anyway not be within bounds because of connection between MoneyAM and Shares Mag - you may well be right about PR - Good luck

I think the new broker will inevitably produce their own Research note and that it would be a surprise if that did not materially increase the opinion of value of the company now that it is in production. The new broker is in the top three mining brokers so that too should lend weight to the opinion being one investors can take seriously. Also I would think that if the gold exploration proves to be as hoped they may need a more a good specialist mining broker to take that fwd.
I agree about the PR, or lack of it. Maybe they'll be swapped next.

Hadn't rec'd my copy of Shares before my last post on here. Steven Frazer's article seems to agree with all that we have been saying on here for some time. The two elements of additional interest, the gold prospecting seems to have been underplayed; the company seem to know they have got a valuable deposit, but cannot fully evaluate it until they drill some more. The projected sp gives no allowance for the speculative interest there will be as drilling commences over the next month. Also, not mentioned at all, is the possibility that other, larger, mining outfits will wish to to take a stake in GFM as a foothold into China, and use that as a shortcut to take advantage of GFM's mgt's reputation with the Chinese authorities.

Anyone know when the drill rig will be on site, it seems like it's been at the docks forever!!!!!!!!!!!