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Griffin Mining - golden future (GFM)     

Sharesure - 10 Jun 2005 19:26

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.

stockbunny - 05 Aug 2005 11:58 - 267 of 1193

Good luck guys - I'm out, cowardly I know but I've taken the money
and run like hell! LOL
If it drops I'll be back in, but I hope it doesn't, as it doesn't deserve to.
:>)

dibbles - 05 Aug 2005 12:08 - 268 of 1193

Stockbunny- good luck, I hope you live to regret it...lol.

dibbles - 05 Aug 2005 12:09 - 269 of 1193

Sharesure, thats quite a few X-trades now, I wonder if they all found the same home??

Sharesure - 05 Aug 2005 12:18 - 270 of 1193

dibbles, maybe, alyhough yesterday's X transaction wasn't as significant as today's might turn out to be. 1.4m shares is a good chunk of stock.
On the negative side obviously either stockbunny, or if it wasn't his block of shares, felt it was time to move on. Like you, I am happy if they made a good profit, but I hope that they have mistimed selling as I think that the interesting, and less risky, time has now commenced and it should turn out to be the most lucrative.

stockbunny - 05 Aug 2005 13:04 - 271 of 1193

Dibbles & Sharesure ;>)
By the way the bunny's shares are hers!
;>)

Sharesure - 05 Aug 2005 14:13 - 272 of 1193

Well stockbunny, sorry to lose you. Was the 1.4m X trade yours? Still think this is not the right time to sell even though I've been in these since they were sub 3p. That might look greedy but if they do firm up on some gold finds the sp will go vertical; and if they don't find their intuitions/early drill holes are replicated over a wider area then they still have a world class zinc mine. What have I missed on the down side?

stockbunny - 05 Aug 2005 14:21 - 273 of 1193

Sharesure - I doubt you have missed anything. Thing is it sounds like you
are a longer term holder then I am, I dislike 'paper profits' and tend to convert
them as soon as possible to actual cash. Unless I keep that 'flow' going I
am unable to then look about and re-invest elsewhere. Although not a day
trader, I am not a long term holder either.

1.4million shares! LOL
Oh I wish they had been mine, I trade much smaller then that and possibly more frequently it's just a very different style of trading. I was in these primarily because
they were mining zinc, the secondary gold side didn't interest me that much
as I like RRS and trade in and out of those for gold exposure.

So on balance and in answer to your question -
You have not missed anything on the downside, I've just done exactly
what I said in my first post today I've taken the cash & run.
:>)

aldwickk - 05 Aug 2005 16:01 - 274 of 1193

I think Stockbunny as been spooked by EPD.

Sharesure - 05 Aug 2005 17:21 - 275 of 1193

Back where we ended up last week! The 40p barrier must be breachable; time GFM's new brokers put together an update.

tipton11 - 05 Aug 2005 19:07 - 276 of 1193

I always seem to sell to soon or else to late...I'll crak it one day I'm sure.

Sharesure - 07 Aug 2005 17:37 - 277 of 1193

Anyone seen any mention of GFM in the w/e press? The 40p barrier must be breached soon, if only because of the rising cash balances at GFM's bank account.

PARKIN - 07 Aug 2005 18:02 - 278 of 1193

No not in press or on Tv or on City wire no mention on any front

Sharesure - 07 Aug 2005 18:11 - 279 of 1193

Thanks, Parkin. As usual then! This company is so overlooked; in some ways not a bad thing as at least the sp is at the current level without hype and means that it will go all the better if good drilling news comes out in a couple of weeks or so.

Sharesure - 09 Aug 2005 11:38 - 280 of 1193

Production is apparently building up well so when a broker update is issued it should confirm a growing cash pile. At $800/1000 per ton profit it builds up quickly!

dibbles - 09 Aug 2005 12:21 - 281 of 1193

Hi Sharesure, can't argue with that.
Any idea's on timescale for broker note?

Sharesure - 09 Aug 2005 13:55 - 282 of 1193

Dibbles, I have no date + don't know anyone in the new firm. I'll try to find a contact who has.

dibbles - 09 Aug 2005 15:42 - 283 of 1193

Sharesure, thanks.
Some reasonable size trades going through again, it seems to be building slowly but surely.

dibbles - 10 Aug 2005 09:46 - 284 of 1193

Me & my big mouth, quite a few sellers this morning.

tipton11 - 10 Aug 2005 10:00 - 285 of 1193

the results in sept will hopefully show a fair amount of cash which should do the trick, meantime a gentle float down might be just what the doc ordered

Sharesure - 10 Aug 2005 10:46 - 286 of 1193

The string of Sells this morning are generally small quantities. For many, they may have made a good gain and decided to move on. For those who want to be there for the results of GFM's gold prospecting the current weakness might be the time to buy more if the mgt.'s intuition/optimism on what they may find is believed. So far none of us holding for the medium term has been let down by backing them. 1400% over 3 years is quite a decent return; confirmation of a significant gold find could turn that into a spectacular return. My guess is that sometime in September we will know if there is a lot more to come or whether a more modest growth pattern based on zinc alone is the future.
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