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.

016622, Yes, but with good reason. I like GFM because it has its core zinc business locted in the right place for both deposits, low production costs and market for its product. It is expanding its production into a market where the price for its product is rising. It has added interest because of its gold drilling and then at some time a competitor is sure to try to make a grab for it.
Potential downside? The world economy, but then that affects everything.

Thank you sharesure....got partially stopped out this week but may up my stake again in the near future. Feel like letting it settle for a while unless we start pushing 60p again.
Regards.

Looking strong today, have we got takeover rumours again?

dibbles, don't think so. The day there are this will be much stronger than it is today in my opinion. Think its just restoring its poise after last week's general market sell off or quite likely a sniff that another drilling result is close. Would be welcome to get another confirmed gold drilling result between the extremities of the other two released so far. That cannot be long away.

Amities / As regards todays trading it seems that mms are extremely reluctant to lower the " bid " price from 53p; Offer price is a little wobbly.But all seems well in the house of GFM ....Cant beat a mining company with NIL gearing; and in production. l expect great things from this commodity rich mine .Great things. Thier market dynamics remind me of monterrico or Cambrain mining . @+ J

OK Sharesure, thanks.
Haven't been paying much attention for a few days as my lad has been in hospital but at least my faithful GFM have cheered me up.

TFC, totally agree.

Today's Times quotes zinc just short of $1500/tonne. $800/tonne profit even allowing for depreciation. GFM's bank account must be growing rapidly!

Looks like GFM is in the final phase of its corrective decline, so could see a good buying op below 45.75p...possibly a cheap as 42p! Then we should see the bulls back in for a rally through 59p

Amities / Slt .! l somewhat agree. .But can i simply add that over the years this has had a very volatile and rocky ride . From 2p to 16p and then back again to 2p in its first roller coaster ride ; and from 16p to 30p and then back again to 16p in its second climb ,,On this occassion it reached a zenith of 59p only to retrace to 49p ...,,,,But in saying that i hasten to add that this is now a producing mine and not a speculative punt: and if did fall to a nadir of 42p i would be a little surprised And re-mortgaging my house. . Seems to have tangible support at the 49p level at the moment . Let us hope this is merely hope this will act as a platform to break through the rather fragile resistance level of 59p,,,,,and then blue skies to 80p which may deter its numerous predators. . From whatever vantage point you view this stock and whatever tools you employ in attemting to call its fair and realistic s/p it has a rosy and spectacular future. ...Bonne chance / .Sois sages ,,,,a/b @+ J ...

And ZOX as done alright these last few days 4p up on the bid today, 157 to 162.

Difficult to see why this should retrace back to 42p - I'm not convinced by charts. As TFC and others point out, it has been a rocky ride but now it is underpinned with mining profits with any good gold drilling news thrown in. sp will progress in lurches on to 100p target over the next 6 months in my view.

Blimey, its a volatile little devil.

cheers GF.

Sharesure

I also find it difficult justify why the share price should drop to 42p. It could be that someone wished they bought in at that price.

grahamsh,

can you fundementally justify why the price is 49p?

If so, I await your calculations.

Come on, don't start accusing others of sinister motives just because they are saying something you don't want to hear!

Ask yourself this, are you comfortable with your current level of investment in Griffin?

Do you think it will increse in price in the future?

If so, why on earth sit glued to the screen watching small intraday price moves and criticising others who have a different opinion to yourself?

Value will out if it's there, patience may be needed though, so please don't start accusing other posters of malice simply becuse you don't like their message.

For the record, I initially bought at 42p and took profit at 54p on the way up. Needless to say, I was suprised to see it hit 59p so soon. I still believe GFM is a value stock and has further topside potential. Certainly the charts I look at call it higher, but I am waiting to buy at cheaper levels as they also suggest consolidation before resumed bull (things never move in a straight line).
Some people might otherwise expect GFM to reach 1 without any pullback along the way, but realistically that is unlikely.
Regards
Lynnzal

lynnzal,

An excellent post IMO, of course there will be retracements along the way, precipitous climbs very often become precipitous falls, slow and steady is better.

I do agree though, if you believe Griffin has long term value, and are happy with your position, there's not much point watching the intraday or disagreeing with other posters, just wait for the market to recognise the value and increase the SP.

Andy, that's all very well but it is irritating to see a poster coming up with an sp of 42p with no justification, possibly just a motive to try to make the sp wobble so that they can make a quick buck. I don't see why grahamsh should justify his opinion of where the sp should be just because someone else draws a few lines on a bit of paper and calls it a chart.
I'm sure GFM's mgt. do not care too much about the sp at the moment as they have no need to raise cash(they have plenty) with the possible risk that a retrenchment just makes a competitor tempted to have a go at them. Perhaps we get some more gold drilling news in 2 weeks.

wibbly wobbly lot!

just keep reading post 614 and go watch something else...

I really do not think that any trades done by us PI's on this board will have much (if any) effect on shareprice. We are tiny in comparison to others.

Baza

Sharesure,

IMHO any negative opinion expressed on here will not result in a fall back to 42p!

Sadly this BB is not that widely read.

I sincerely doubt whether it would move the price one iota, and if he posted that on EVERY BB going, it certainly wouldn't cause a 15% drop!

I have looked at the chart. and there are other areas of support above 42p, IMO, but there is also a small one there, so surely he is as entitled to have an opinion as the bulls?

I thought his question regarding the fumdementals reasonable in the circumstances, as the chart shows a possible fall, so surely if it's not going to drop because of some fundemental reason, it would be nice see it demonstrated for all to assess.

To accuse another poster of malicious motives without any proof is a bit strong IMO, and MAM could go down the sad road of other BB's if we resort to those type of comments.

i'm sure the management of GFM don't gice a hoot about the intraday price, because they realise value will out in the end, so there's no need to keep checking it.

If you believe in GFM to increase the shareprice to a much higher level, no problem, just patience is required.

If GFM drops to 42p, and then increases to 1, so what?

I'd be happy with that, wouldn't you?

If the guy buys in at 42p, and enjoys the ride with everyone else, good for him, that's what trading is all about IMO.



016622

Exactly!



Bhunt1910,

Of course not, some of the sells are above normal PI size anyway.


I hold GFM.