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.

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.

Not sure about the news leaking theory.........certainly does happen, I've seen it many times.

Squaregain have just one Analysts figures on their site. P/E 55 and a sell!

Not sure what to make of it. Used to be in here and left with a small profit. Was only meant to be out temporarily but dissapointed myself with the lack of sp movement until today.

Stringy you gotta be in it to win it and GFM is one share that you really don't want to miss IMHO...I am not kidding I really do think GFM will be 2 or more in 12-18 months DYOR.
Di

Yay 44p ...come on GFM...finally people are waking up to the huge profits that GFM are making
Di :-)

I was rather unambitious yesterday - so lets look for a close of 45p to-day and Shares Mag full page spread to-morrow then upwards to 50p - nice to see only limited profit taking to-day. Seems most of us have faith that this one may soon explode and I agree 2.00 looks on the cards.

is there any reasoning behind the 2 Oak & Di or just a nice figure to dream about?
I know of a serious target some have for 70p short term but havent heard elsewhere above 1.

016622 without getting technical with loads of figures just look at the profits that GFM are making each day on zinc plus the cash in the bank and then add the Gold. Just wait for a statement about how much gold has been found and whoosh 2 is not such a dream.
Di

Also, GFM are keen to more than double zinc production to maximise profits during 3 year tax free period....Luvverly.

cheers guys n girls...lets see

How wrong can we be ? - Best result is that MMs are "collecting" for a large buyer and have done a little tree shaking - end of play will tell us (like watching another b****y test match !!

Todays british bulls.
Griffin Mining
Daily Commentary


Our system posted a BUY-IF today. The previous SELL recommendation that was confirmed was made on 22.09.2005 (1) days ago, when the stock price was 42.2500. Since then GFM has gained 4.14% .

Is this finally a good time to buy? Well, it depends. First check what happened at after hours trading and future values. Then, follow the next session very carefully and be on your toes. This candlestick pattern is a bullish one, but we have to see whether it will be confirmed or not.

Do you see a gap-up at the market open? Do you see a white candlestick forming with a higher close at the session's end? Shortly, is it a nice bullish day? If so, place your buy orders and open new long positions. The market is now on the bull side.

But, be careful, also. If you see a gap-down when the market opens, or if the session closes with a bearish sentiment producing a black candlestick characterized by a lower close, do not challenge the market. Ignore the BUY-IF alert. Cancel the buy orders and cover any new long positions that you might have opened. Bears are still in control.

[MOTTO OF THE DAY]
Buy only if the bulls are in charge
Forget about it if the bears surge

Talk english man...

Come back from a week away and look at the price difference. At last others are catching on to this stock. Although Sun.Tel. mention will have helped the fact that GFM has maintained its new levels is encouraging. Andy, you asked if the gold drilling programme would confirm a commercial mine; I am led to believe that at levels of 1gm/ton some mines are profitable; the earlier test drilling at GFM's mine yielded much greater amounts than that but need more extensive drilling to confirm that the results were cocistent over a wider area. The chairman at the AGM reckoned they would but went out of his way to say that was a personal view at that stage.

Sharesure,

Well that would depend on the cost of producing the gold!

In China I would expect the cost to be very reasonable, due to low labour costs. So, with the current high gold price, 1gm per ton could well be economical, but I would prefer to see a slightly higher grade, to gaurd against any fall in the POG, although I don't see that happenning in the near future, quite the opposite in fact.

Andy, Agree re finds of 1g/ton. That wouldn't get anyone excited. I think that the chairman's AGM optimism was based on early drill results over 40 times greater than that; but it is right to be cautious until wider results are known, in case those early results just struck an isolated vein/deposit. Anyway, I doubt we have many weeks to wait before some more extensive drilling results are issued.

Sharesure Hi, hope you had a good holiday.
I asked a question recently, wondered if you could help with :- assuming the drill test results are good, will this mean an economic mine awaits us or will still further tests be needed?

p.s.- has anyone here looked at/bought AIMR? Looking at buying and just wondered if anyone else has any extra info on them? TIA.

Dibbles, apologies, didn't check back carefully enough. Thought it was asked by Andy. I reckon that the viabilility is a foregone conclusion. It's just a case of how good it is, in my opinion, if I am interpreting the AGM comments correctly.