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.

Well Oakapples we know they are getting $1700 a tonne and I think the profit is $1000 per tonne...I am sure I will corrected if I am wrong. I think GFM could easily hit 40p today..37.5p before opening this morning.
I am sure Griffin is going to have a fantastic future so certain that I have more money in Griffin than anything else at the moment.
Di

Excellent news ths morning

Baza

Not to sure that the share price will go up to 40p today, as we all knew that they had buyers for the zinc, but maybe the news on the price they are getting for it and the news on the drilling will help the price today.

Andy,

Yes you are right about ZOX its just that i bought a few yesterday and they seem to be about to move up from they flat linning at last and the risk grade for them is only 118 reuters and 116 barclays .

brilliant

brilliant

I believe a round of applause for the management is in order.
A great achievement, and as dyamite points out the last
statement, everything to look forward to.
CONGRATULATIONS GRIFFIN BOARD.
cyril

All
Great news. The only thing missing is how much they got for the zinc. If they are getting over the market value as stated in the AGM, that should have been in the RNS. This is my largest holding and I am here for long term. Does anybody know how much they got for the zinc?

They have an agreed price of $1700/ton
Over $2million.
cyril

I thought it was agreed in advance at $1700

Not sure of the differance.But in advance it is.
cyril

This new thread was posted yesterday, did he sell ? LOL

Griffin Mining Stuck on 36p (GFM)
Peter011 - 26 Jul 2005 19:32
Seems to be going nowhere. I may sell

Really good news, the mgt. have yet again shown that they do what they say they will do. In answer to earlier queries re the profit/ton, their costs (stated at AGM) are $595/ton ($700/ton if depreciation is included). As for their selling price I would expect to see a statement on that after a few months production. The best part of today's news is that any short positions will now need to be closed really fast because the company will increasingly have the cash to buy in its shares. This was something the chairman stated they intended to do. Perhaps it won't happen immediately but in the event that the RC drilling programme confirms gold in good quantities and they then need to seek some more funds to build a further plant for dealing with just gold ore, they would need to make sure that the sp is robust.

I did go to the AGM and I did hear the expected selling price at the gate. I still would like to read that in GFM RNS, as that is significant news.

excellent news this morning :>)

Dynamite / oakapples,

Well I make that 1,200,000, which is a nice start, 'IF' they received $1700 per ton, and as grahamsh rightly pointed out earlier, the price was not stated in the RNS!

Looking at the recent price of zinc since the AGM sees a slight fall, around 7%, so we should be careful in presuming the are receiving $1700 IMO. (The recent fall of the against the US$ will slightly offset this when profits are converted to the sterling)



Clearly the sale of the zinc is good news, but to be honest it is only what was expected after they announced that production had started, so I don't think this alone justifies the price increase this morning.

What is good news is that the RC drill is now onsite, but the news from that will not be available until the autumn according to the RNS.

aldwick,

ok I see your point, and yes ZOX do seem to be flatlining, and I have been watching for signs of an upturn too!

Its nice to see things come to fruition after such a long wait for all concerned

Stop Press

Date: July 28, 2005

CHINA MINING 2005

Anybody with ambitions to be anything in the mining world will already have booked a trip to Beijing in November forCHINA MINING 2005. It will not be just those who have an interest in projects in that vast, and largely unexplored country, but also anyone who want to meet potential buyers for product. Again, this does not just mean buyersof bulk minerals such as iron ore and coal, but any othermetals and minerals for which there are no organised end markets such as cobalt, tungsten, molybdenum, tantalum or beach sands to name but a few.

Nor does it end here. The Chinese have shown that they are interested in investing in primary production. Maybethesurplus dollarsgenerated by trade with the US can fill that vital role in funding capital development of mines without recourse to Western banks with their one-eyed focus on hedging.

China has never been as focussed as it is today on strategic co-operation opportunities with the international mining community, both at home and abroad. Chinas large resource market, excellent business opportunities, as well as potential for new partnerships and financial arrangementsare increasingly attractive to world wide mining enterprises together with their supporting financial and consulting services.

As His Excellencythe Vice Premier of the Peoples Republic Of China,Zeng Peiyan confirms, We wish to develop further co-operation opportunities in the international mining industry at all levels and areas of the value chain, in varying manners and approaches, in order to establish a stable, economical and safe supply of resources.

Last year CHINA MINING 2004 hosted over 1,500 delegatesat the Beijing Hotel. This year it is moving to the Beijing International ConventionCentre where Asias premier mining congress and exhibition will be hosted by the Ministry of Land and Resources. Over 2,000 industry and government leaders are expectedfrom the international and Chinese mining community.

Think the reason ZOX is flatlining is because even though they have found a similar sized deposit to GFM's one, they still have to get the funds together to build the smelter; that takes time. GFM is now established as a zinc producer and has a deposit which has already been assessed at a 14.5yr. mine life. There is always the possibility of that being extended as they explore more of their licence area.
In the short term they don't need to; the priority is to accurately assess the gold bearing structures over the next six weeks. The current sp looks solid just based on the zinc production.

Sharesure,

Take a look at VOX's other project, where they extract zinc from the slag!

I think there is real value in that process, and the recovery rate is exceptional, it would appear.

IMHO the two companies cannot be compared really, they are two different beasts at different stages of development.