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.

Are we likely to see production updates this soon?

GFM have said that the production is going to plan, so presumably each week they produce around 1000/1500 tons of concentrate, depending on the ore grade. If they are making $500/$700 per ton, the cash in the bank should be building up nicely, subject to what they spend on exploration. I would think the newly appointed broker would want to issue an early review of how they view progress to date.

Sharesure, if they are still getting around $1700 p/t at the gate wouldn't profit per ton be nearer $1000?

Dibbles, yes, it would. I thought it might be better to be more conservative until the mgt. or their brokers ( which really are a leap fwd. as they do not just take just any companies onto their books and probably not usually ones with this size of mkt. cap., so they obviously are looking ahead to bigger things happening.) are prepared to issue a statement. With the chairman in town this week, maybe the announcement, forecast by the chairman at the AGM, will come out. I can't think what could be announced at this time, it would seem too early for any production or exploration updates; perhaps news of new exploration assets from the Chinese government?

dibbles,

They have already changed brokers!

Andy,

I know we've changed brokers, thats why I'd hope to see a new broker note soon.

The article in Shares mag. seemed to imply that there was a broker (Collins Stewart?) update floating around with a price target of 46p by y/e. Shares upped that to 53p. These projections are all mildly interesting for the timebeing but will mean nothing if the current exploration is successful.

The shares mag also placed future earnings on the standard LME zinc price which we know we are beating, at least for the moment.

Looks like more buys than sells again today and we are down, or am I just an old cynic.
Answers on a postcard please to "Grumpy old Git".

It may suggest that the MMs now like the look of this one and are shaking the trees. I for one am holding tight.

Not sure I follow why that should be, Oakapples, the bit about MM's shaking the tree. I suspect they have been levelling their books. I'm surprised that GFM has gone lower today, irrespective of the absurdity of their being fewer sells than buys. On the brighter side, if there are any more press mentions or news then they should respond well. I, too, am here as a holder for as long as this company keeps prospecting. Also means the CGT liabilitywill be less after another year of holding.

me too Oakapples...I think GFM is worth holding for a couple of years

I take your point Sharesure - either way same pattern to-day. Three times as many buys as sells and SP down

All,

Please note , not all the trades in a share appear on the MAM or other BB trades pages!

There are TWO other trading platforms I believe, for institutional rather than private investors, so there may be some selling there that is not apparent in the trades we can see.

PS

The two x 50,000 trades were a rollover, not two buys!

Thanks Andy - to add to that I trade with HSBC and quite often my transactions do not appear on this site

The odd thing about the total volume is that Moneyam volumes seems to tie in with the FT on most days. Yet again today it is the same, more buys than sells, and a weaker sp. Wish I had the extra cash right now to buy some more because I haven't seen any comment anywhere pointing to a different conclusion than all on this thread seem to have, ie that this company is going to continue to perfoform well.

aldwick,

Not really a fair comparison as both companies are at different stages of their development (IMHO)

I hold GFM, I do not hold ZOX (YET)

Looking even better...Am I right in thinking that GFM have a turnover of $2.04m just from the 1200 tonnes already and that their profit is $1.2m in only a few weeks mining? Note also the last bit from Ninkov!!!!

Griffin Mining Ld
27 July 2005





60 St James's Street, London SW1A 1LE, United Kingdom

Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773

E mail:
griffin@griffinmining.com





27th July 2005





FIRST SALE OF ZINC CONCENTRATE



REVERSE CIRCULATION DRILL RIG ON SITE





Griffin Mining Limited ('Griffin' or the 'Company') is pleased to announce that
the first sale of zinc concentrate from its Caijiaying zinc gold mine has been
made with payment received in advance of the delivery of 1,200 tonnes of zinc
concentrate to local Chinese smelters.



The reverse circulation drill rig ('RC Rig') imported from Australia has now
reached the Caijiaying mine site where it has been placed on the first drill pad
ready for the immediate commencement of drilling.





Mladen Ninkov, Griffin's Chairman, commented:



'Griffin has now left the world of the junior speculative resource companies and
entered the realm of revenue producing mining companies. This is a just reward
for Griffin's loyal shareholders. With the arrival of the RC Rig on site, I
look forward to further enhancing shareholder value with the expectation of the
drill results as they become available in the autumn.'





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

I hope your sums are right following two pieces of anticipated news Andy and Sharesure will "be in the case". We are in for an interesting day and future.