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.

Today's sells are puzzling. Does anyone know if someone is slagging off GFM somewhere?As far as I know nothing has changed with the business, except that zinc prices have hardened. So why the weakness and why the selling pressure?

Hardly any buys and the sp recovers, looks like someone has their hoover out again.

Sharesure, a poster on the other bb said he sold 2x20k because he can see the sp dropping back a couple of pence.
I think some see sells going thru so they sell, no bad news as far as I know.

Dibbles, dumb isn't it? selling just because a few others do! Glad it has steadied up, it shouldn't be as low as this sp anyway. When I last spoke to the mgt. they were still hoping to get out some drilling news around the end of this month so there is scope for some wider interest then.

Sharesure, assuming the news is good, does this decide whether its an economic mine or does that require further testing yet?

If the Co is showing a profit & they have extracted minerals already ie. Gold Zinc & gold being @ a 17 yr high close last friday & the price of labour will be a lot cheaper than GB surley the mine should be profitable & the other parts of the co they have ie I beleive they have a holding in India if I remember correctly from some years ago it shoulnt need any more testing if minerals have been extracted or am I wrong.

parkin,

Griffin currently extract gold as a by product of the zinc mining, and they only have a licence for UP TO 3% of Au as a percentage of Zn mined.

I personally think they aren't producing too much gold at the moment.

On the otherhand, the price of zinc has increased substantially, so for the moment the focus remains there IMO.

Parkin, if your post refers to my comment, I was talking about recent test drilling of gold anomalies, not current profitable zinc mine.

INTERVIEW-Zhuzhou eyes zinc mines in China, abroad
Friday 16 September 2005, 2:57am EST
Printer Friendly | Email Article | Reprints | RSS

By Polly Yam

HONG KONG, Sept 16 (Reuters) - Zhuzhou Smelter, China's second-largest zinc producer by capacity, is looking to acquire mines at home and abroad to tackle a shortage of raw materials, a senior company executive said on Friday.

Wang Jianjun, head of international trade at Zhuzhou, said the company would receive 50,000 tonnes of zinc-in-concentrate and 20,000 tonnes of lead a year from a mine in Pakistan due to start operating in 2007.

Zhuzhou owned a stake of less than 40 percent of the mine, he said, but would take its entire output. The majority owner of the mine is state-owned China Metallurgical Construction Corp.

"We are working on other mining investment projects in Sichuan and Inner Mongolia," Wang told Reuters on the sidelines of the China Metals Markets Strategies Conference organised by Metal Events Ltd.

Zhuzhou bought two zinc mines in 2003 in China's western regions of Sichuan and Tibet.

Wang said Zhuzhou had no plans to expand its zinc capacity, which is operated by listed arm Zhuye Torch Metals Co. Ltd. (600961.SS: Quote, Profile, Research).

It has around 300,000 tonnes of zinc capacity -- second in China only to Huludao Zinc (000751.SZ: Quote, Profile, Research) -- and another 100,000 tonnes of lead capacity.

Zhuzhou would produce 300,000 tonnes of zinc ingot and alloy this year, up 7 percent from last year, Wang said.

The company sees China consuming at least 2.7 million tonnes of zinc this year, up 8 percent from last year, due to rising demand from the steel and plating sectors.

China's net imports of refined zinc would rise to about 200,000 tonnes this year from only 15,286 tonnes in 2004, Wang said.

China, previously a major zinc exporter, became a net importer last year due to growing consumption at home. Net imports rose to 72,975 tonnes in the first seven months of 2005.

Official data showed the country produced 1.5 million tonnes of zinc in January-July 2005, up 4.1 percent from a year ago. It mined 943,328 tonnes of zinc in the same period, up 7.8 percent.

Wang said Zhuzhou had joined Hunan Nonferrous Metals Group Co. and the group planned an initial public offering in Hong Kong in late 2005. The IPO would cover most metal assets in Hunan province, including China's largest antimony producer, Hsikwangshan Twinkling Star Co. Ltd.

Wang said many state-owned metals companies preferred to form bigger groups because it improved their ability to finance the search for resources. Hunan is interested in buying domestic and overseas zinc and tungsten mines.

Many Chinese metals groups also eyed IPOs in domestic markets or Hong Kong because requirements for listed companies could force those state-owned groups to improve their management.



Reuters 2005. All Rights Reserved.

A BUY im todays Sunday Telegraph

Griffin Mining

We've twice recommended the shares in Griffin Mining (38p), the Aim-listed company which has built a zinc and gold mine in China. The first time we tipped the shares, they were at 13.5p in December 2002 and we recommended them again once the project was up and running in January this year. The mine, near Beijing, is now operating extremely profitably with the price of zinc having almost doubled over the past two years.

In addition, the company has been exploring the potential for gold mining and is understood to have found sizeable deposits of an economic grade. Quite apart from the gold prospects, the company should become cash-flow positive over the next six months. Keep buying.

Are they guessing about the gold potential or hearing ahead of the crowd?

p.s.- aldwickk, good finds, thanks.....

Look at gold go!!!!!!
What a good time this would be to announce a major find.

we have lift off!

Momentum probably due to Sunday Telegraph - Would be nice to close over the 40p barrier to-day followed by a further recommendation in Shares Mag on Thursday then an announcement re gold - (I use to dream about other matters !!)

looks good up 3.25 any news?

looks good up 3.25 any news?

finally the price is waking up.....2 here we come :-)

Thats a bit better, just momentum or news leaking?

I think it is just the weekend writeups plus sonner or later GFM just had to go up...its been held back a long time. I expect a whoosh up like JKX did after sitting there for ages :-)
Di

I'm with you Dynamite, and there's gold in them there hills to come yet. lol.