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.

Blimey I have a big profit already. That strike will surely send Zinc prices even higher and this can only benefit GFM.

cheers GF.

The last strike lasted 3 weeks.

The shares article has certainly spiced the price up, although some sellers coming in at this level - We will probably see some profit taking now, but medium term looks good.

What did it basicaly say in shares Mag please anyone???????????????

cheers GF.

Just had another dabble at 56.5p.

cheers GF.

I think it may settle back from this price for a while, as they do after a rise from a tip. Then it's just a case of that all important announcement which hopefully will be good news and keep the sp rising but I expect some volatility as this share is now heavily traded.

A buy statement by in copy of Shares Mag. today which reads
China based Griffin has struck gold again @ its Caijaying mine not far from Beijing.A single drill holes shows 3 strikes - 3.5mtrs & 3.9 mtrs & 22.7 mtrs down - & the Co. is wisely going to investigate upgrade its investment in the mine.This latest develoment could trigger significant upgrades to likley gold quantities underfoot.
Meanwhile,zinc production has started & its first sales to Chinese smelters were completed in July.The shares have jumped 35% so far after our original tip back in july21 but this could be just the start .

Aldwickk...no not reading old newspapers just one of the things in the back of my mind that I had seen when I originally bought
Di

Thanks 016622.

cheers GF.

Goldfinger,

Thanks for the post, and I agree, currently the price of zinc looks strong, but there is always a potential downside, and something like a huge recession in the USA, and/or a dollar collapse would certainly change things!

For one, LME zinc is priced in dollars.

A US recession would have large implications for the Chinese economy, and latest US housing figures are not encouraging, so my point was that you have to balance enthusiasm with a touch of realism, there's no such thing as a sure fire bet (IMO)




robstuff,

I have been in GFM for months, so I don't need any advice.

Please don't ruin a good thread by going down the old BB route of everyone that doesn't agree with you has a malicious agenda, I just think some people are getting carred away, and nobody yet has managed to justify a price of 2 per share!

Gut feeling is fine, but at some time fundementals come into play, and there is a tendancy for consolidation at that point.

The herd are quick to move onto the next hot stock as soon as the current one cools off!

I don't think just a tip in Share mag would have moved GFM up this fast. Di' i was only joking.

More likely news is about to come out...maybe gold or a takeover...I hope it is not the latter

The buying today seems to be all small amounts, like it has been tipped somewhere, although I don't know where. The higher sp must be welcome to the mgt. although it is not at anything like the level at which it is safe from a bid. Don't forget institutions hold nearly 50% and their holdings must always be up for grabs at the right pice. I hope not in the short term because the mgt. deserve to be given the chance to see this project through.

Sharesure,

Well 3,400,000 shares were traded, which is some volume, suggesting more than just a tipsheet to me.

On the otherhand, you are right about trade sizes being PI's, IMO, looking at the largest trades of the day for example;

100,000
100,000
75,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
47,000
40,000
40,000
40,000

So only some 792,000 is possibly larger than PI trades, so it would appear that you may well be correct, although I think it's a continuation os the Shares Mag / Sunday Telegraph tip, then the gold RNS, drawing in PI's with the momentum.

Anyway, a good day for all!

Now up 72% from price tipped!

rob,

Griffin now has a greater market cap than Avocet Mining, despite AVM producing around 200,000 - 250,000 ozs gold in 2005 and 2006!

It does make you wonder whether GFM is overvalued, or AVM undervalued?

I own both.

Andy,
I see you now post on the KYS thread, you told me you were going to take a look at them did you like what you saw, they also have a low risk rating.

Stop Press

Date: October 04, 2005

Griffin Mining Foresees Increasing Importance Of Gold At Its Caijiaying Mine.

Would that all company directors of subscribing companies would follow the example of Roger of Griffin Mining who e-mailed to point out that we had missed out on two consecutive weeks of a rising share price in our "That was the week that was in London" feature. We monitor press releases from subscribing companies as far as possible, but run-of the-mill announcements may camouflage a real bit of news and it helps if directors telephone (44 1797 270014) to bring such things to our attention. The same goes for our London Correspondent who keeps an eye on share prices , but it is always possible for something to come in just below his radar screen.

In the case of Griffin Mining, its shares rose by 6p or 15.7 per cent in the week ending 23 September and followed this up with 14.1 per cent jump last week. That made a 12.25 per cent rise in 2 weeks or 32.2 per cent which is quite a performance, particularly as the price has risen yet again this week.

Minews is not a tipster and tends to avoid comment on share prices, but there has to be a reason for a sustained rise of this proportion. Not too difficult to find, either. On September 27 Griffin announced that a a further exciting gold intersection has been obtained from the underground drilling programme at its Caijiaying mine in China, and that the company has commissioned a study to investigate upgrading production.

Funnily enough it seems to have been the high grade gold intersection that caught the imagination of investors rather than the possible upgrade of production. Once a company is in production it gets a re-rating and respect for what has been achieved in bringing the first western mine into production in China. The Caijiaying mine and processing plant reached practical completion less than 3 months after production began in June of this year and the mine has been consistently producing ore in excess of the required rate of 3,850 tonnes per week in the past month. The process plant has now been fully commissioned for zinc production and has achieved its design recovery rate of 92% and initial production of 45.4 tonnes per day.

The gold drilling results give the company a blue sky element and this is what keeps investors interested. A week or two earlier Griffin announced intercepts of 8.8 metres at 19.2 g/t and 6.2 metres at 14.2 g/t gold in an underground hole. Now it has come out with 22.7 metres at 8.36 g/t and 3.9 metres at 5.28 g/t from an underground hole 210 metres south of the previous one at the southern end of Zone 111 at Caijiaying. As these intersections occur at roughly the same level it is quite possible that, with a bit of infill drilling , the company may be able to come up with a gold resource estimate in quite short order. No wonder the shares have been on the move..

aldwick,

Yes they seem ok to be honest, and Mr Cawkwell seems to be investing quite a lot of his money at market price into it, which gives a degree of confidence, given that he was a director until a short while ago.

I read the thread for his postings as much as anything, I'm fully invested at the moment, and Kyrso looks mor elomg term, but I may well take a chunk when I sell something.

Hi Andy, nice to speak to you again, but unlike others on this thread Im not buying for the gold but thats obviously whats pushed it up so quickly just recently.

My take is on the Zinc and Zinc alone. With prices at 8 years high and far more to come in the next 3 years due to supply/demand imbalance I hope to see this one moving much higher although and no disrepect to anyone I feel rather uneasy being in with the crowd as anyone who sees my posts I always go the other way as a contrarian investor.

Still I see this one yes moving down on bad days but I feel the trend is very strong upwards.

cheers GF.