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.

Maybe if mixed with Aldwick!!

Griffin Mining Ld
05 September 2005


Griffin Mining Limited

60 St James's Street, London SW1A 1LE, United Kingdom
Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773
E mail:
griffin@griffinmining.com

5th September 2005


INTERIM STATEMENT FOR THE 6 MONTHS TO 30 JUNE 2005


Griffin Mining Limited ('Griffin'or the 'Company') has today published its
interim results for the 6 months ended 30th June 2005.


Highlights:

Start of production at the Caijiaying zinc gold mine ('Caijiaying') in
China

Initial production rate of 600 tonnes of ore per day achieved

First sales of zinc concentrate made to local Chinese smelters in July 2005

$13.8m incurred on construction of the mine and processing facilities at
Caijiaying to 30th June 2005 compared with estimates of $15.7m

Commencement of extensive surface drill programme to assess known gold
prospects

Gold intersections from underground resource definition drilling include
8.8m @ 19.2 g/t and 6.2m @ 14.2g/t


Financial:

The interim financial results cover the period up to the commencement of
production at Caijiaying. No mining revenues were generated prior to 30th June
2005.

The Company recorded a loss for the 6 months ended 30th June 2005 of $684,000
compared with a profit of $138,000 in the same period in 2004. Exchange losses
of $272,000 (2004 gains $408,000) were recorded on foreign currency deposits,
caused by a strengthening of the US dollar, whilst interest income of $164,000
(2004 $283,000) was lower with funds being utilised to construct the Caijiaying
zinc gold mine and processing facilities.

Operating costs in the 6 months to 30th June 2005 increased marginally to
$576,000 (2004 $553,000) with increased activity at Caijiaying.

At 30th June 2005, $13.8m had been incurred on construction of the mine and
processing facilities at Caijiaying. With production starting at Caijiaying at
the end of June 2005, this compares favourably with pre production and working
capital estimates in the feasibility study of $15.7m.

Good progress has been made in bringing Caijiaying into production at an initial
production rate of 200,000 tonnes of ore per annum.


Chairman's statement

I am delighted to report on the Company's progress in the six months to 30 June
2005, a period which represents a turning point in Griffin's history. It saw
the start of production at Caijiaying and, since the period end, the first sale
of zinc concentrate to local Chinese smelters.

The Company continues to strive to achieve consistency in achieving the planned
initial production rate of 600 tonnes of ore per day and the scheduled zinc
recovery rate. In addition the Company is actively pursuing means by which
production can be increased as further ore is delineated via underground
drilling.

The leases at Caijiaying contain highly prospective epithermal gold targets and
continued prospective base metals targets. As a result, the Company has
commenced a comprehensive regional exploration programme consisting of 18,000
metres of reverse circulation drilling due to be completed by the end of the
summer. At the same time, ongoing underground resource definition drilling has
produced significant gold intersections including one drill hole with 8.8m @
19.2 g/t and 6.2m @ 14.2 g/t.

In the search for growth in our region and in our area of expertise, the Company
continues to pursue and evaluate other world class mining projects.

In light of the above, your Board looks forward to an exciting future.


Further information

Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772
Roger Goodwin - Finance Director
Griffin Mining Limited

Andrew Smith/Martin Eales Telephone:+44(0)20 7523 8350
Collins Stewart Limited

Hugo de Salis Telephone: +44(0) 20 7242 4477
St Brides Media & Finance Ltd


Griffin Mining Limited's shares are quoted on the Alternative Investment Market
(AIM) of the London Stock Exchange (symbol GFM).

The Company's news releases are available on the Company's web site:

www.griffinmining.com




GRIFFIN MINING LIMITED
CONSOLIDATED CONDENSED PROFIT AND LOSS ACCOUNT

(expressed in thousands US dollars)

6 months to 6 months to Year to
30/06/2005 30/06/2004 31/12/2004
Unaudited Unaudited Audited
$000 $000 $000
Turnover - - -
Cost of sales - - -

Gross profit - - -

Net operating expenses (576) (553) (1,048)

Operating (Loss) (576) (553) (1,048)

Foreign exchange (losses) / profits (272) 408 939
Interest receivable and similar income 164 283 507

(Loss) / profit on ordinary activities before
taxation (684) 138 398

Taxation on (loss) / profit on ordinary - - -
activities

(Loss) / profit for the financial period (684) 138 398

(Loss) / profit per share (cents) (0.4) 0.1 0.23


GRIFFIN MINING LIMITED
CONSOLIDATED CONDENSED BALANCE SHEET


(expressed in thousands US dollars)

30/6/2005 30/6/2004 31/12/2004
Unaudited Unaudited Audited
$000 $000 $000

Fixed Assets
Intangible assets - exploration interests 39 37 39
Tangible assets - mining properties 14,411 8,735 11,770
Tangible assets - plant and equipment 7,026 798 5,109
Tangible assets - other 14 15 15

21,490 9,585 16,933

Current Assets
Stocks 39 - -
Portfolio investments 35 38 27
Accounts receivable 343 42 108
Prepaid expenses 178 169 168
Cash and deposits 7,489 19,908 12,985

8,084 20,157 13,288

Creditors: amounts falling due within one year (505) (720) (885)

Net current assets 7,579 19,437 12,403

Total net assets 29,069 29,022 29,336

Capital and reserves
Share capital 1,783 1,768 1,773
Share premium 36,968 36,472 36,594
Contributing surplus 3,690 3,690 3,690
Investment revaluation reserve (838) (836) (846)
Foreign exchange reserve (118) (80) (143)
Profit & loss account (12,416) (11,992) (11,732)

Shareholders' equity interests 29,069 29,022 29,336

Attributable net assets per share (cents) 16 16 17

Number of shares in issue 178,327,731 176,827,731 177,327,731



GRIFFIN MINING LIMITED
CONSOLIDATED CONDENSED CASH FLOW STATEMENT

(expressed in thousands US dollars)

6 months to 6 months to Year to
30/06/2005 30/06/2004 31/12/2004
Unaudited Unaudited Audited
$000 $000 $000

Net cash (outflow) / inflow from operating
activities (1,517) 373 611

Investing activities
Interest received 164 283 507
Payments to acquire intangible fixed assets - - (557)
Payments to acquire tangible mining fixed assets (4,525) (3,067) (10,020)
Payments to acquire other tangible fixed assets (2) (15) (17)
Net cash (outflow) from investing activities (4,363) (2,799) (10,087)

Net cash (outflow) before financing (5,880) (2,426) (9,476)

Financing
Issue of ordinary share capital 384 16,255 16,391
Expenses paid in connection with share issue - (752) (761)
384 15,503 15,630

(Decrease) / Increase in cash and cash equivalents (5,496) 13,077 6,154

Reconciliation of operating (loss) to net cash
(outflow) / inflow from operating activities
Operating loss (576) (553) (1,048)
Depreciation 2 2 5
(Increase) in stocks (38) - -
(Increase) in debtors and prepayments (245) (112) (177)
(Decrease) / increase in creditors (380) 635 799
Other non-cash income, including exchange
differences (280) 401 1,032

(1,517) 373 611



GRIFFIN MINING LIMITED
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


(expressed in thousands US dollars)

6 months to 6 months to Year to
30/06/2005 30/06/2004 31/12/2004
Unaudited Unaudited Audited
$000 $000 $000

(Loss) / profit for the period (684) 138 398
Unrealised gains / (losses) on investments 8 (25) (35)
Currency translation differences in foreign currency
net investments 25 41 (22)

Total (losses) / gains recognised in the period (651) 154 341


Losses and profits for the financial year are the same as those on an historical
cost basis.



GRIFFIN MINING LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENT


1. This statement has been prepared using accounting policies and presentation
consistent with those applied in the preparation of the statutory accounts
of the Company.

2. Copies of this interim report are being sent to all registered
shareholders. Additional copies are available from the Company's London
office, 60 St James's Street, London, SW1A 1LE.

3. (Losses) / earnings per share have been calculated on the basis of the net
(loss) after taxation of $684,000 (2003 profit $138,000) and the weighted
average number of shares in issue in the period ended 30 June 2005 of
178,135,423 (2004 164,023,885). There is no dilutive effect of outstanding
share purchase options.

4. The condensed accounts set out above do not constitute statutory accounts
as defined by Section 84 of the Bermuda Companies Act 1981 or Section 240
of the UK Companies Act 1985. The condensed balance sheet at 31 December
2004 and the condensed profit and loss account, condensed cash flow
statement and condensed statement of total recognised gains and losses for
the year then ended have been extracted from the Group's 2004 statutory
financial statements upon which the auditors' opinion is unqualified.

5. Reconciliation of shareholders' funds.
6 months to 6 months to Year to
30/06/2005 30/06/2004 31/12/2004
Unaudited Unaudited Audited
$000 $000 $000

Total (losses) / gains recognised in the period (651) 154 341
Issue of Ordinary Shares in the period 384 15,503 15,630

Net (reduction in) additions to shareholders'
funds (267) 15,657 15,971
Opening shareholders' funds 29,336 13,365 13,365

Closing shareholders' funds 29,069 29,022 29,336




This information is provided by RNS
The company news service from the London Stock Exchange

Financial Mail on sun
"The devastated city of New Orleans is a vital port. Its warehouses hold 25% of all America's coffee bean stores and almost half of all the zinc traded on the London Metals Exchange.
In London's Liffe market, where contracts are traded for future commodity supplies, the price of coffee beans soared 8%, while zinc jumped 5% last week."

Would have thought GFM would have moved up more this morning.

Aldwickk, so would I. The early gold drilling results look quite good; some mines make money on a fraction of those figures. Gold in the ground is worth between $25-$50/troy ounce depending on depth. So there is plenty of scope for the Chairman's view re increasingly becoming a gold producer, being realised.

aldwick, sharesure,

well i though tthe most pertinent part of the RNS was this;

----------------------------

The Company continues to strive to achieve consistency in achieving the planned
initial production rate of 600 tonnes of ore per day and the scheduled zinc recovery rate.

----------------------------

IMHO, this suggests that the company have not consistently achieved either, yet, and is probably the reason for the drop this morning!

Grahamsha,

The zinc in New Orlenans is STILL included in the LME stocks, because it still exists, and is simply temporarily inaccessible.

Estimtes are that they are due to start pumping out the city soon, so if there is any rise in the price of zinc, caused by this temporary inaccessibility, it will only be temporary, as the zinc will soon be re-available, and would then fall back.

After 911, a considerable amount of silver (and gold) was stored in vauilts close to the WTC, but the price of silver didn't rocket!

Sharesure,

Although I agree the gold results were excellent, they were quoted in isolation, and they didn't mention how many holes were drilled, and what distance apart the successfuil holes were.

We need more information before we are able to draw any proper conclusions IMO.

Andy, I agree re need for a lot more info on the drilling; that was why last week I posted that I didn't think they would be able to say anything until end Sept/early Oct. I feel relaxed about GFM building up the zinc production, the gold drilling and prospect of other assets to explore just giving the added potential for some surprises every now and again.
Re the price of zinc and the disaster in New Orleans, I agree that that is only a temporary influence; however there is an underlying pressure on the zinc price because of medium term predictions of shortages; that's assuming the world economy continues to grow well

I liked this bit,

"In the search for growth in our region and in our area of expertise, the Company continues to pursue and evaluate other world class mining projects".

Not the 1st time the co. have said that so a potential nice surprise rns to come in the future.

I always worry when anyone mentions anything "world class"

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Main page content:
Zinc prices hit eight year high
By Chris Flood
Published: September 6 2005 12:18 | Last updated: September 6 2005 12:18

Zinc prices rose to an eight year high after the London Metal Exchange suspended delivery against warranted metals stored in New Orleans.







The LME has almost 250,000 tonnes stored in New Orleans from a total of around 560,000 tonnes and there are concerns that the condition of the zinc stocks could have deteriorated if flooding has caused oxidisation in the metal.

Three month zinc prices reached $1,452.50 a tonne before easing back to $1,442.50. Traders said prices were also supported by covering of short-positions.

Copper prices also appear to have been affected by concerns over LME stocks in New Orleans. Three-month copper edged 0.4 per cent higher to $3,695.7 a tonne having reached an all-time peak of $3,725 a tonne on Friday. The LME has 900 tonnes of copper stored in New Orleans out of a total of around 70,000 tonnes.

Traders said that concerns about the outlook for the US economy combined with dollar weakness and lower US Treasury yields had encouraged hedge funds to switch interest into copper and away from the US currency.

Dealers also expect demand for base metals such as copper to be supported by a surge in reconstruction spending in the areas affected by Katrina.

Gold prices eased modestly to $443.10/$443.80 a troy ounce from Mondays close in London of $445.50/$446.25. Prices could be supported by further dollar weakness amid growing speculation that the Federal Reserve might be forced to take a break from raising interest rates. However, traders also said that a correction to lower levels was still a risk due to speculative long positions in the market.

In spite of the announcement by the International Energy Association that its members would release 2m barrels of oil for thirty days to compensate for the loss of production and refining capacity cause by the impact of Katrina, crude oil prices are not expected to sell-off aggressively. IPE Brent for October delivery rose 42 cents to $65.27.

Trading in New York is due to restart after the markets were closed for the Labor Day public holiday on Monday.

UK forward gas prices edged lower with the October IPE gas contract trading

aldwickk, I don't want to be a pessimist here, but isn't zinc meant to prevent corrosion; therefore being under water for a few months should not affect it, should it?

LONDON, Sept 6 (Reuters) - The world's biggest metal trading market, the London Metal Exchange (LME), shook markets on Tuesday as it temporarily suspended warranted metal stored in New Orleans warehouses after Hurricane Katrina devastated the city.

The move pushed zinc prices on the LME to $1,452.50 a tonne -- a high not seen since September 1997. The LME only last week assured the market that metal stored in its New Orleans warehouses remained good for delivery.

Prices eased back to $1,431/437 at 0830 GMT for LME zinc, a metal used mostly as an anti-corrosive additive in steel to make cars and trucks.

"The Exchange has noted that the shortage of reliable information about conditions in New Orleans has led to unacceptable levels of uncertainty about the extent to which metal on LME warrant in New Orleans may be subject to damage from flooding," it said.

"In order to safeguard the orderliness of trading, the Exchange has decided temporarily to suspend New Orleans warrants until the situation can be clarified."

The move prompted investors to buy zinc to replace gaps in orders for short-term delivery.

The LME has almost 250,000 tonnes of zinc stored in New Orleans out of a total of about 560,000, while it only has 900 tonnes of copper out of more than 70,000.

"The (LME) Special Committee will keep the LME zinc market under review and will remove the backwardation limit as soon as it considers it prudent to do so," the LME said.

The LME has just 1,200 tonnes of aluminium out of a total of almost 510,000 stored in New Orleans.

With a large proportion of its zinc stocks stored in warehouses left in the ravaged trail of Hurrance Katrina, further measures have been taken to try and ease worried investors, the LME said.

Those with short positions that are due for delivery on Tuesday, and who are unable to effect physical delivery, will be able to defer by a day without penalty, it said.

The LME said those holding short positions falling due on Wednesday, and subsequent prompt dates, and who are unable to effect delivery or borrow metal at the premium demanded for prompt delivery, of $3.50 per tonne, will be able to defer for a day at a penalty of $3.50 a tonne.

Those with long positions for prompt delivery on those days who are subject to deferred delivery will be entitled to compensation of $3.50 a day, it added.

The LME has suspended warrants for various reasons in the past. A few years ago it suspended warranted metal stored in the Netherlands after the facility was removed from the list of LME warranted warehouses.



Reuters 2005. All Rights Reserved.

Oxidization, i read.

Or it could have been something like that.

aldwickk, zinc price up $77/ton today apparently. One longer term outcome of the disaster from Hurricane Katrina may be the quantities of zinc req'd for the eventual rebuild there. Possibly a large amount of those stocks which are underwater right now will need to be prioritised for the rebuilding.

Sharesure,

I picked this up elsewhere.

---------------------------------

FT. From article by K.Morrison.

Zinc prices jumped to an 8yr high after the London Metal Exchange suspended
some trading amid concern over the condition of large stockpiles in New Orleans.
N.O. accounts for half of the inventories of zinc that can be traded on the LME and a quarter of the world's total stockpiles.

Prices fell late afternoon as some N.O. warehouses said that the zinc in storage was not damaged.

Andy, Guess yesterday's blip up was bound to have a reaction. When recently I spoke to GFM mgt. they were very pleased with how evrything was going, boh on production build up, selling the product at higher than LME prices and the RC drilling. They expect to be abe to say more about their RC drilling at the end of the month. Think they are now going to be drilling the southern part of the licence area; that was where the best prospect of gold was thought to be. Up to now the gold finds are incidental to the zinc finds.

Some chunky trades at the close, and starting to see those X- trades again.