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.

I think Stockbunny as been spooked by EPD.

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

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

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.

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

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.

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!

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

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

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

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

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

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.

Interesting Buys v Sells. !.2m Sells and virtually no Buys and the price dips marginally. Is someone is putting together a Buy order to mop the whole lot up?

I was thinking that earlier, also the other day we had mostly sells then the sp rose and a large trade came through.
I think someone is definately taking some large positions here.

Dibbles, if you look at that last trade of 900,000 shares posted as a Sell, it seems odd. I reckon it is actually a Buy at the mid qoute price. If that is the case that is very good news since it means that not only have a lot of small time investors been shaken out but there is also a big buyer of the stock. There always was talk of this being a vulnerable time for GFM; maybe there is something in the wind?

Sharesure, certainly looks that way.
The 900k & 252k would explain the sp holding up as it did.
Over the last 2-3 weeks we've had a number of large X-trades and buys going through, if they are all finding the same home then its most likely an institution or a predator taking a position imo.
I noticed today that Xstrata said they would be looking for acquisitions to spend their latest profits on, don't know if they are a likely candidate but they can't be the only ones with money to burn.

dibbles, certainly looks that way; my view is still that this is going to turn out well whether GFM stays independent or attracts a bid. Makes interesting watching.
If you have any spare cash available for a two week punt, take a look at the thread on Chaco (CHP). all geared around a decision next Friday. It promises little downside risk, with a lot of potential.

Sharesure, will have a look, thanks.
Assuming a bid comes what price would you be happy with?
If we get production updates and good drilling results I could see us hitting 1+ early next year anyway or am I expecting too much?

diddles, the mgt. have always been on record as saying they wouldn't sell for less than 1/share. I think that even that would not be enough for the company given the drilling programme and the potential for confirming much larger gold deposits than anything that they have been able to announce to date. The 'fly' in all this is how much they can persuade the institutions to back their belief that the gold is going to be proved at greater levels. I suspect that the drilling is being targetted at those areas first to get an answer fast; I don't think they have a lot of time before a bidder emerges, if there is one, because they are in the awkward period where they probably cannot prove what they believe to be possible.