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.

According to a post on other bb, New Stars Patrick Evershed has been buying GFM.
Perhaps he was our mop-up merchant recently.

Dibbles, This morning looks more promising for GFM. I think the recent dip has probably shaken out a few of the smaller punters and hopefully replaced them with some larger, and more medium term, shareholders. Each month that goes by just ticks up more cash in GFM's bank and brings nearer the prospect of further good drilling news.

Surprised to see sp rise so early on todays trades.
Can we expect to see a larger buy later in the day I wonder?

Zinc price up today.

Aldwickk, do you have a link to a zinc price site where it is quoted in $/ton. This morning it was $1349/ton in the Times, but you didn't say what it had gone to today in your last post. Every rise is virtually all profit.

http://www.kitcometals.com/charts/Zinc.html

Aldwick,

That's the price per LB, not per ton!

I looked on Kitco too!

http://www.basemetals.com/

Aldwick,

Well done, perhaps sharesure can now add the link to the header please?

1118 GMT [Dow Jones] Vedanta Resources (VED.LN) +2.5% at 578p amid concerns Hurricane Katrina may have impacted zinc warehousing in New Orleans, says London-based mining analyst. "If it's underwater there could be a squeeze in the zinc market," he adds. LME zinc currently $1,404/ton, +2.8% from the previous PM kerb. (JR)

That explains the recent rapid rise for zinc...
Shame GFM's sp isn't benefiting yet.

Sharesure, as you speak to the co. I thought I'd ask you, have they mentioned when the interims or update may be this month?

dibbles, No, I am not sure of a date. I haven't contacted them very recently as I didn't want to become a nuisance! I suspect that the interims will come out when they are ready to update on drilling news. My guess would be early October since that would have given them 2.5 months with their RC drilling programme. When I last spoke to them they confirmed that production of zinc was building up well and of course they are benefiting from a much higher zinc price. The real extra news will be any confirmation of the earlier promising gold cores they drilled. That would confirm the Chairman's AGM comments earlier this year.

OK Sharesure, thanks.
Just wondered as many on the other bb seem to think 7th sept. is a likely date due to last years timing although the year before it was 29th so could be anytime imo.

Hi Sharesure,

"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."

Was any indication of gold reserve size mentioned?

Also thanks for the AGM update, beneficial to all monitoring this thread.

explosive, Not as such that would make it worth relying on. It would have been easy for there to have been a few lucky early strikes which maybe gave the Chairman reason to make his 'personal' comment about the company moving more towards being a gold producer. His only other comment was that he thought the geology where they had drilled first did resemble the geology of another site he had had experience of in the past. Nothing more firm than that. In my view the gold prospects are not in the price at this level; the volumes and cashflow from the zinc are good enough for that.

Apparently there are new photo's on the website..
I can't see them yet but obviously some can.

dibbles, try this link http://www.griffinmining.co.uk/gmphoto.htm

One of these shows some very yellow rock!