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.

Sharesure,

Zincox website is HERE

Hi Guys - Remember GFM - nice buy of 250K gone through - "ZOX" it to um Griffin !!

2x 250,000 today, both x trades.

Are we actually going to flatline today?
That will be a first for some time.

It would be nice to see the IC pick up on GFM tomorrow, partic. as news of production came too late for Shares Tues. lunchtime copy deadline. Otherwise looks like it'll be drift until the next RNS.

Shares mag usually do a small follow up on their " Plays of the Week " within a couple of weeks so that might help, also I'd imagine the latest news will get a mention on most minex type sites.

We did seem to have some good buying today considering we are near our highs so hopefully we won't drift too much.
I'd consider a little trading but with the higher lows recently I'd probably end up having to pay more to get back in.

Nice buys including 500K and a good rise in SP.

noted...

Was this in the IC? Haven't seen it yet. Hope we push through the 40p barrier considering the favourable buys v sells today.

Was this in the IC? Haven't seen it yet. Hope we push through the 40p barrier considering the favourable buys v sells today.

Oakapples,

Yes good volume and a decent rise, ZOX up 10p too, I'll check the price of zinc!

Yes zinc up a bit.

And gold.

Sharesure
GFM is not in the IC today.Good rise lets hope it holds.

Thanks, grahamsh. In which case the buys v sells ratio looks like more solid evidence that a few others are catching on to what is happenning here. I reckon we have 4 to 6 weeks before much news on the drilling comes through. One advantage GFM has it its own on-site assay facility which they can staff with independent assayers as well as their own; it makes it all the quicker in evaluating drill cores because they won't have to go abroad anymore, speeding up the accuracy of the drilling process. Reckon this should turn out to be a nice ride from here on, we plus the mgt deserve it.

The old spread is getting a bit evil
bid 38.5p
offer 40p!

terrific buy signal to finish the week on

A break through 40p should come next week and there should be plenty of support to keep it there as drilling news gets closer and also as each week goes by GFM builds its cash pile.

Suppose it was inevitable that last week's rise would cause a shake out at the start of this week; still think the move through 40p is imminent if only because of the cash GFM is piling up. It gives the company a lot of room to do whatever they wish, either more extensive drilling or buying in the company's shares, although the latter might be unnecessary in the short term.