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, the GFM bb on advfn has access to daily price.
www.kitcometals.com $0.5944/1b -up 0.0074.

Dibbles, thanks. If that is UK lbs and 2240lbs/ton then it looks like $1331/ton; quite a rise in one day. Is that the right coversion or are there different tonnes, in the same way that troy ozs are different from normal ozs.

Sharesure, not sure but the 30 day chart sure looks good.
Stock levels falling also, 60 day chart has dropped from 620000 tonnes to 568000 tonnes.

Dibbles,

Hpefully so, but AIM companies don't have to announce in advance, so we have to wai and see.

Sharesure,

Your post # 337 sums up the tax position very succinctly, well said, and invaluable information for long term AIM stock investors.

Thanks aldwickk,

Look at it go!!!!!!!

Nice chart, aldwickk. Very low share volume on GFM today but in view of the proportion of sells relative to buys, we need the 'sweeper' in to mop up.

Assuming the 37.9p's are sells would suggest the mm's are quite happy to take them, perhaps for a willing buyer again!

A few sells going through again today...
Impatient so & so's...........................

The last few buys have helped restore near equilibrium. I think we can still rely on the sweeper to mop up at the end of trading if there is still unsold stock. Just cannot seem to push through that 40p barrier................yet.

Struggling a bit today, might have a top-up if we go any lower...

Perverse! Zinc reaches new high and GFM sp weakens. That doesn't make any sense

Thats strange, more sells and we tick back up a fraction!!!!!!!!!!!
I wonder if our mystery buyer is back?

Its the same with ZOX, its the zinc price or stocks.

the sweeper hasn't been around the lst few days, but with low volume it probably wasn't worth it. Today it should be so it will be interesting to see if there is an end of day T trade at about the size of the buy/sell difference

With zinc still hitting new highs, all of which is additional profit, does this stock weaken. It doesn't make any sense on the production business, let alone the potential for new finds, both zinc and gold,from 18000m of drilling in progress.
The new brokers seem to be doing too little. No newsflow from them or an updated profit forecast; the last was prepared when zinc was $1100/ton, it is now $1340/ton.

Doesn't make much sense does it.
I guess the traders/impatient see better short-term opportunities elsewhere or see GFM drifting lower on no news.