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.

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.

Justification.
The way I read the charts, corrective declines tend to occur in three waves (in bull markets there would be two downward and one up to complete a correction). GFM saw one down from 59p to 45.75p. the second wave back up to 55p and we are currently experiencing the third (and probable last) leg lower. In terms of predictive qualities, the third leg tends to have a relationship with the first of 61.8% or equality. This gives me two targets. One is near the 45.75p low and the other is near to 42p (actually 41.75p, but I rounded up).
I don't actually care if nobody likes what I think. I posted because I have an interest to buy GFM and those are my levels, which I thought others may be interested to see. Please note that these are not hard and fast rules, but 'tendencies' that market prices demonstrate on a frequent enough basis for me to trade off.
Incidentally, if the market breaks over 55p I may be tempted to consider the correction over and would possibly look to buy back in.
Oh and I really don't consider anything I write will move the markets (as nice as it would be for my ego).
Regards
Lynnzal

lynzal , you need a thick skin to call a down move - by the way have you read anything on crowd theory because thats what you where seeing above?.

Lynzal,

Nice post, and succinctly justifies your opinion to those that doubt the credibility of your intentions.

Well from what i have read on this and the other BB's i should top up anywere between 45 and 46 bid

aldwick,

normally I would agree with you, but today is a bad day all round, and US figures due out anytime could drive the whole maret down further, so I am waiting before buying anything else.

Sorry I didn't want to start a war. I apologise for my comment, everyone is entitled to their opinion.

grahamsh,

Thanks, nicely said, I think we can draw a line under this now.

In fact, if you look at the percentage of Griffin's fall, it's in line with many AIM mining juniors today, and more than others, Avocet for example, a company that already produces 220,000 ozs of gold PA.

US figures slightly worse, so no massive selloff yet, although sentiment is negative. (Bloomberg)

Looking at the ticker for the UK, virtually every stock is red today.

Andy I agree (#626)

grahamsh, I don't think you need to appologise for anything. It's open forum and people are free to say what they like. It's good to have debate as it gets all the ideas out in the open.
I'm always happy to explain the reasoning behind my posts because I always think my analysis through (i.e. not just picking numbers out of the air).

maddoctor, I only say what I see and so can qualify my thoughts. And yes I have read all sorts of things on crowd theory, it's what the price movements in a chart reflect isn't it!?

Once things start to turn around, I will post my bullish projections...
Regards
Lynnzal

I ment 45 to 46 offer price.

lynnzal, thanks for your reasoning in post 628; I hope it makes money for you. I am sceptical about charts for small stocks which can be very news sensitive. Still, if it works for you that is all that matters. I just don't think I would like to rely on that as a method of picking small stocks. It takes all sorts!

A good day for GFM...any thoughts? As an EVS holder I need cheering up!!!!!

certainly a sudden jump...smells off leaked news???

Zinc prices rise Rs 1,150 in less than two months

Dilip Kumar Jha / Mumbai October 13, 2005



Zinc slabs price has jumped dramatically by Rs 1,150 to Rs 9,050 per quintal in Mumbai non-ferrous metals market in the last one-and-a-half month on rising demand from the steel galvanising industry.

Galvanised steel is a major component of infrastructure projects such as buildings, bridges, airports and stadiums. Approximately 67 per cent of zinc produced globally is used for steel galvanising. The devastation caused by Hurricane Katrina also added to the surge in zinc price as 50 per cent of global zinc deposits lies in warehouses in New Orleans.

Spot zinc on LME perked up $125 to $1,484 per tonne on October 11 following a supply crunch. LME registered warehouses in New Orleans are holding 2,48,575 metric tonne (mt) of zinc, of which 2,01,375 mt is open tonnage.

The supply of the metal was suspended since good delivery became impossible because of the hurricane. The price movement in the international market and the domestic market is in sync.

An increasing concern in the market is the strike at Belgian metals company Umicore SAs 2,50,000 mt Balen zinc smelter plant. The strike began last Thursday. Analysts believe the prices would increase further, if the company management does not resolve the issues immediately.

Usually the rising prices take a toll on treatment charges fee paid to miners to refine concentrate into zinc metal which is expected to dip to double-digit figure this year due to a persistent concentrate shortage.

In 2005, the benchmark treatment charges fell to a record low of around $126 a mt. In the next year, annual contracts might conclude as low at $95-$110 per mt.

Apart from steel galvanising, zinc is primarily used by the toys industry, which consumes approximately 16 per cent of the world zinc production.

India being one of the largest toys producer and consumer, domestic demand for zinc is expected to grow significantly. Hindustan Zinc is the largest zinc producer in the country with an overall production of 5.75 lakh tonne. Binani Zinc comes at the second slot with a capacity of 33,000 tonne.

The price of zinc slabs is expected to grow further in the domestic market as the production here has failed to meet the rising demand from consumer industries. The demand, which stood at 3.5 lakh tonne in 2003-04, stood at 4 lakh tonne in 2004-05.

The demand is expected to grow 12-15 per cent in the next five years.



Zinc prices rise Rs 1,150 in less than two months

Dilip Kumar Jha / Mumbai October 13, 2005



Zinc slabs price has jumped dramatically by Rs 1,150 to Rs 9,050 per quintal in Mumbai non-ferrous metals market in the last one-and-a-half month on rising demand from the steel galvanising industry.

Galvanised steel is a major component of infrastructure projects such as buildings, bridges, airports and stadiums. Approximately 67 per cent of zinc produced globally is used for steel galvanising. The devastation caused by Hurricane Katrina also added to the surge in zinc price as 50 per cent of global zinc deposits lies in warehouses in New Orleans.

Spot zinc on LME perked up $125 to $1,484 per tonne on October 11 following a supply crunch. LME registered warehouses in New Orleans are holding 2,48,575 metric tonne (mt) of zinc, of which 2,01,375 mt is open tonnage.

The supply of the metal was suspended since good delivery became impossible because of the hurricane. The price movement in the international market and the domestic market is in sync.

An increasing concern in the market is the strike at Belgian metals company Umicore SAs 2,50,000 mt Balen zinc smelter plant. The strike began last Thursday. Analysts believe the prices would increase further, if the company management does not resolve the issues immediately.

Usually the rising prices take a toll on treatment charges fee paid to miners to refine concentrate into zinc metal which is expected to dip to double-digit figure this year due to a persistent concentrate shortage.

In 2005, the benchmark treatment charges fell to a record low of around $126 a mt. In the next year, annual contracts might conclude as low at $95-$110 per mt.

Apart from steel galvanising, zinc is primarily used by the toys industry, which consumes approximately 16 per cent of the world zinc production.

India being one of the largest toys producer and consumer, domestic demand for zinc is expected to grow significantly. Hindustan Zinc is the largest zinc producer in the country with an overall production of 5.75 lakh tonne. Binani Zinc comes at the second slot with a capacity of 33,000 tonne.

The price of zinc slabs is expected to grow further in the domestic market as the production here has failed to meet the rising demand from consumer industries. The demand, which stood at 3.5 lakh tonne in 2003-04, stood at 4 lakh tonne in 2004-05.

The demand is expected to grow 12-15 per cent in the next five years.