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.

Pull backs are just part of the upward trend, nothing to worry about. The whole market looks rotten today. Even GED hasnt risen today and thats remarkable in itself.

cheers GF.

yes, just a tad too vertical at the moment!

016622,

it's almost reassuring for a small drop, I don't like precipitous climbs!

Slow and steady is preferable IMO, just as long as it's rising.


Sharesure,

I take your point, you are of course exactly right, but the market's taking a dip today, maybe the recent spurt of activity is retracing all round?

I have a feeling I may be topping up sooner rather than later.

Andy, I don't think anyone will lose money on GFM at this level taking a 3 month view; meanwhile if you have some cash doing nothing why not take a look at CHP ahead of their AGM which is at 11.00 on Wed. 5 Oct. If they don't put out a press release first thing tomorrow in my opinion an sp influencing release will come out mid morning. It generally has at their other meetings.

Sharesure,

I'll put in on my watchlist for tomorrow, thanks.

Resource sector all round was very weak today, hopefully it will bounce back tomorrow.

all very quiet today?....

Just shellshock!!!!!!!!!!!!!

it'll b ok.
cant expect 38 to 58 without a bit of a redress!

Especially on a day like today!

Would have been more surprised had the sp held up.

Amities / slt ,,,d'accord completement . lt was utterly inevitable following a percentile gain of 60% in a companies s/p in such a relativaly short period of 3 weeks that profit taking would be be rife After all this sudden surge in s/p is PI led. What with construction , development, and succesful implentation of a modern mine on budget ,and as planned immediately extracting the zinc has quite satisfied the market ; the prospect of impressive gold intersections has exited the market .... But something quite overlooked as yet is actually a commodity which ABSOLUTELY drives Chinas new flourishing highly profitable hi tec low density/ high margins electronics sector; and that commodity is silver ! which is used extensively in the production of every circuit board within every electronic device like your plasma Tv which have proven so popular in the USA or such like gizmos. ..Chinas demand for silver has increased 20% year on year since 2000 in its endeavours to satisfy the appetite of its burgeoning electronics industry. lt is the apple of Pekings eye: and accordingly filled thier fiscal coffers. .......And what is more this mine has very high concentrations of silver which was not equated into Griffins assayal at inception due to the severely depressed price of silver .lt was simply considered commercially unviable at that time. But how times have changed and Chinas electronics industry NEEDS silver to feed the insatiable appetite of this sector . Most weldings and soldering are done with this commodity . l am bullish on gold yet FAR more bullish on silver. And if you care to dredge through GFM s older drilling reports you will see this mine has massive concentrations of silver.... ...ln fact this is a mine with a plethora of both precious and base metals .....ln addition they are on extremely good terms with the Chinese at local, regional and national level. Recently Chinas powers to be issued an edict for to encourage and promote foreign mining companies: and it seems GFM were singled out for their excellent corporate governance . l may be in and out of GFM on the journey.But i am absolutely convinced this is a winner as i have always said in private correspondence to a few people on this very board since it was 2p at a time when the dot com companies were in freefall ...Along with JKX and FDI , this is my largest holding . , l soon anticipate a re-rating of the company as it has indeed moved from a junior exploration set-up to a producing income generating entity;.and with it a much improved s/p ......bonne chance a' tous des vous ....sois sages a'bientot ,,@+ J ,,Only problem could be lvanhoe , or AAL, or even BLT who would love to be set free with thier diggers on this apparently commodity rich landscape.lf this was to occur l believe the board would demand a very hefty premium. And utter refusal if GFM institutional backers made real thier statement of having high hopes for GFM.

TFC...so you have filled your short after being negative last week and now you have bought back hence your about turn of sentiment! You also go by the name Simon Cawkwell do you???
Di

AK not EK.

Aldwick,

pardon?

Robstuff,

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robstuff - 03 Oct 2005 11:15 - 520 of 582
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.
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This is what I was referring to the other day, taken form the press today;


Concerns over the potential fallout from higher US rates hung over stocks in the UK and Europe. The FTSE 100 fell 66 points to 5,427.

The mining sector fell sharply on worries that higher US interest rates could
mean a slowdown in the global economy, reducing demand for commodities.

Xstrata shed 5% to 13.89, while BHP Billiton was off 4% at 858p.


Griffin has fallen, just like all the others, no one man is an island, nor any one stock, IMO.

Griffin is still a good stock, IMHO, but, like it's peers, not immune to the vagaries of the world aconomy!

Amities / Slt ,,Chere Dynamite / l should not have to reiterate this fact but l freely admit, and ALWAYS have , that for the main part i am a percentages trader employing CFDS as my fiscal instrument of choice for maximum leverage: and YES ! i go both short and long depending on the situ at hand. . BUT !! GFM was a totally different prospect; l happen to have held for 5 years . Have held through both thick and thin even thoughout the Berlin/Bremen listing scandal which in allowing naked shorting was like printing your own money . Watched the s/p rise from 2pto 16p and back again . From 30p to 16p and back again . l retained them due to a number of reasons.From geopolitical reasoning and excellent assayals down to the calibre of the board . This absurd notion that i have shorted GFM is incorrect; and i can only presume it was a misunderstanding having its origins on a different thread .Namely that utter piece of crap called NML .When i stated in response to your enquiry that i had sold my SEO stake @ 28p and had been shorting it ever since and had made a fortune in having done so; and added as an aside that i was about to do the same with GFM. What i was saying was exactly that- l was going to make a MAKE a fortune out of it. !!! NOT short it !! ..ln the interests of courtesy as is my way i conceed the English was perhaps a little opaque and vague : and for that reason i have attempted to clarify this for you . a'bientot @+ J

Amities / GFM is a lot more than a good stock lt is a success story waiting to happen .....The ilk of AAL , BLT and lvanhoe plus the chinese themselves do not go sniffing around with dogs ,,,Well the Chinese cant actually as they killed them all in an effort to clean up Peking for the lndochina games ...@+.

OK TFC..thanks for the clarification
Di

I would like to top up my GFM holding, am thinking of buying at around 40p, any views.

By the way ZOX share price is as steady as a rock so far today.

Aldwick,

Probably becuse ZOX did not run up so quickly in the last few weeks, GFM climbed a cliff so was more likely to retrace heavily IMO.

40p would be a good buy price IMO, but would like to see how far the general market sellof continues first.

What did you mean in post 580?

Reply via PM if you prefer.