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.

Does anyone on this thread take RHPSG; I am interested to know if they have yet picked up on GFM, it's their sort of company. Does anyone know when it is published?

Can't help you there sharesure - but things are looking good
in the GFM camp! :>)

Stockbunny, thanks. On another thread I was told that RHPSG is out on the first sat. each month so maybe 2/7/05 will feature it.I reckon the rest of this week should see the price strengthen even more anyway. Even if Shares mag. or RHPSG do not pick up on it, the Times and Mail on Sunday are supporters.

And a bit of support certainly wouldn't hurt matters!
may be a bit slow in arriving...but any time is better
then never.
:>)

Didn't they say at the AGM that there would be a full page spread on GFM in
the Mail on Sunday soon?

Well sooner would be better as the price is moving nicely and a
graph at the moment would look pretty nice to anyone considering
investing, especially if they always and only invest in rising shares.

Also only 2 more weeks before we find out what Chairman was hinting at thats
going to cause the shares to start motoring.

I believe the Mail on Sunday may be doing an article on China spread over two weeks starting this weekend and it is hoped that GFM will figure as a successful mining pioneer.I heard that their reporter had visited the site, and they were fans even in the exploration stage. Apart from that I am expecting to see a change of broker to one of the big 3 in mining to reflect the company in its new phase. Big priority must be to sack the PR firm they have and I don't think that that will be long away.
Nice charts, aldwickk

Sharesure,

At the AGM it was mentioned that the reporters stayed two days at the Griffin site, so I expect a fair piece on them to be honest.

I wouldn't worry about Shares or IC featuring GFM, if there is value here the market will find it, not the media.

And if RHPS recomends GFM, I'd probably sell!

Andy, That's a little unfair on Tom Bulford's tip sheet, isn't it? I have always reckoned that he has been better than most at finding shares to invest in, although I am always wary about buying straight after a tip. It means missing the odd one where their timing is spot on, eg Shares mag. re Asia Energy, but most times patience seems to be rewarded.
With GFM, I just haven't understood why it has remained overlooked by so many for so long; I got to wondering what I was missing, as it has in recent times always struck me as a one way bet, barring a global meltdown. Even if China does something daft with Taiwan, that might not only require more zinc from home grown sources ( to counter any sanctions from the West), but would also put upward pressure on the price of gold.

Sharesure,

Well if you tell me what Tom Bulford is recommending, over a period of time, I may change my mind!

let's just say his predecessors had more than their fair share of bloopers!

The normal practice is to recommend several shares per month (scatter gun approach), using MID prices! LOL! then publicise your winners!

I agree theat GFM does seem unloved by the market, and am not sure why, but today's traders were positive, and the price has (probably) breached resistance, so even without any publicity, we're away!

Andy, Let's hope for another resistance level breaking day; I agree that it all looks in place for an excellent ride from now on without help from publicity. There is nothing in today's Shares mag. anyway unless the index is inaccurate.

Not a word in 'Shares Mag'as I can see nothing in index or in prospector or in letters being sent I wish someone would wake thier ideas up for who is supposed to be covering the Co.

Parkin, I share your frustration. Will be writing again to Jeremy Lacey, editor, but when they can do a lead article on China without covering GFM, small hope that they have a view on the company as a general results article. All this in spite of covering a lot of much smaller caps. plus, in my view in recent issues, some really spec. mining stocks where shareholders are likely to lose their shirt. If you or any others following this thread feel like emailing Shares on editorial@shares.msm.co.uk it might help the team realise that they are not serving many of their readers' interests on this company. Nobody is asking them to ramp it; I'd just like to see their view of it and see if it coincides with mine.

Zinc price down?

no...don't think so...just intra day variations I think

Just wondered, as several miners have taken a hit today, some
through the copper price falling, wondered - with GFM falling back
a tad - if zinc was also suffering.
Chart on basemetals.com shows a slight drop since May.

If zinc is downa little,it is unlikely to be a lasting problem as the supply/demand gap projections should provide a lot of pressure for price of zinc to rise. Much depends on Chinese economy continuing its growth. The recent revaluation of the Remnimbi by some 6 % will make the profits from zinc sales within China worth more.