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.

Aldwick
If GFM were buying shares I am sure they would have to report it to the market. This looks like good press sending GFM north.

GFM is now only starting to do what I originally hoped when I started this particular thread in June. Shares mag. took loads of prompting to become interested in it but it is good to know that at last they appreciate what GFM are about. Anyone in the gold mining field will back up the comment that the gold results referred to so far could represent a very profitable ore deposit. GFM's mgt. are right to be cautious (why change their style?) before getting independent assay results. These are hard to come by as there is a shortage of facilities. I am certain GFM's mgt. know what they have in prospect. I doubt that they have been in the mkt buying in shares.
As for targets, the Ch. always reckoned the zinc production alone would justify an sp of 100p. That looks likely as production is increased. AS for the gold, I shouldn't think we will have to wait beyond the next 3 months to see what that adds.

GFM has started the week well. Has anyone seen any weekend tip for GFM?

Not seen anything since Shares mag update......

Basically I think everyone is just waking up to how much potential GFM has. Just wait until the next piece of good news...then GFM will really fly upwards.
Doing really well today although bound to be some profit taking.
Di

people who bought on the back of the telegraph & shares had a good week and are having some more...

Dynamite,

When people start stating 2 targets, in order to avoid being accused of simply pulling a figure out of thin air, or 'ramping', it's best to indlude some tangible justification for the target price IMO.

What would the market cap be? PE ratio? What level of production, and commodity price would support the 2 target price? That sort of thing.

Then you have to consider whether the world economy may retrace a little, any serious fall in USA would be felt very hard in China, for example. Oil prices have not yet taken their toll on the world economy (IMHO) is another variable.

I would be interested to see your calculations to support a 2 target, it seems higher than other targets that I have seen.

Di, Good news that this rise is not driven by tips. Agree with you about the direction of the sp when the next news comes out although predicting the timing is impossible in my view. Assay work is difficult to programme because of availability, but there is also a possibility of drilling news at any time, even if it is subject to assay corroboration.

This share will not be economy lead for a long time, it will be results of new finds - mining new prospects that will greatly enhance value many times over hopefully. You can do an analysis of the economies, metal prices etc for the likes of RIO and ANTO but a big find for GFM is much more significant.

Looks like my friend in the city may have got it right again, he said this would double when it was 45p so fingers still crossed

robstuff,

Are you joking?

Are you saying that Griffin are immune to the world price and demand for commodities?

If Griffin make a significant find, the price will rise for sure, but some people are talking as though it's already in the bag, which it certainly isn't, until formally announced in an RNS.

Some of griffin's peers already have large quantities of JORC standard gold and other mineral reserves, and are already mining, and at around a similar merket cap, so there's possibly some blue sky already in the price now IMO.


Sharesure,

They will not, IMO, announce any essays from their own lab, but from an independent one, to avoid any Bre - X type accustaions!

Andy I am not someone who looks at all the technicalities of a share. I look at the general over all picture and a shares potential in relation to other shares. PDX for instance that I know you are still in; I first bought at 46p and carried on buying and selling until 230p. I no longer have an interest in PDX at the current price levels because I do not 'feel' happy with the price with the amount of shares in issue...that is not to say it won't go up more but the turnover and even future potential in the short term does not justify the price and I am sure with all your ratios and technicalities it would not stand up to the current price.So I am out. GFM on the other hand has greater potential to my mind in the shorter term DYOR. The zinc is there it is being mined and a huge stockpile has been created, The Chinese are customers on tap willing top pay over the odds for a local supply of ore. Gold is there too and to what extent is yet to be seen. GFM is making profits now and will not need to dilute shares unlike others I could mention.
All this is my gut feel and over all view not plucked out of the air. I am good at finding shares that do very well and GFM IMHO will get to 2 in the next couple of years. The Times viewed the zinc that GFM found alone as being worth 2 a share and that was a while back. I stick to my guns but all DYOR this is my view.
Di

Andy taken this from the resident mining expert on the TMF board a well respected investor...............

Zinc looks set to be the star performer of the base metals in the next few years, taking the crown from copper. Reckon its time to increase exposure to zinc - especially zinc and China/India.

There are indisputable reasons for this, not least years of under-investment in mining capacity that has left the concentrate market severely under-supplied. This will be a major restraint on refined supply growth and will ensure that the global refined market will remain in deficit for the next 3 yrs - even if you factor in a very bearish rate of economic/demand growth. Such a strong outlook is unique among the base metals at the moment, and analysts are revising up their Zn price forecasts all the time. Somewhere around/above $1,600 has become the concensus for annual cash prices for the 2006-2008 period.

Miners with Zn projects coming on stream now or early in this period should be looked on favourably. A couple of ideas:

* Griffin GFM - just started production at a new mine in China (i.e. right metal, right place, right time!). Potential to expand output rapidly, and some exciting Zn and Au exploration projects.ENDS. My thanks to Nelson.

Andy I agree that theres quite a bit in the price and have been toying with this all weekend, but the fact that Zinc prices are at 8 year highs and also set to continue (could go through the roof) persuaded me to buy the stock this morning. I look at the gold as the cream on top.

cheers GF.

Goldfinger,
Just read your post on GED, good to have you on board.

Thats the Zinc price should go through the ceiling, just to clarify things.

cheers GF.

Cheers aldwickk.

Gf.

Andy,looks like you're looking for an excuse not to jump aboard or if you're in, a reason to sell?. Go on, just go with the gut.
I haven't mentioned the fundamentals, and am no expert too but with global demand and prices being in GFMs favour and the timescale for production not being too distant I think we could see 2 in medium term. Others seem to think so too so i'm happy to go along with the trend.

3 Oct 11:30
Strike begins at Falconbridge Kidd Creek division
Reuters - Falconbridge Ltd. said a strike by 615 workers began at its Kidd Creek division on Saturday after the company and union failed to agree on terms of a new labor contract. Falconbridge, the world's third-biggest nickel and zinc producer

yes, good to see you Gf
one of the more sense less non-sense posters to many a board...

Zinc prices do look like they're on their way up, will the strike at Falconbridge have an effect?