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.

volumes too low to say anything

Hi Sharesure,
See my postng #650. Nothing has yet changed for me. Sp is currently 53p from 53.5p close of Monday so very difficult to comment on that move ;)

another 2 lge buys this am 250k & 200K

Share price holding up well.

care to elaborate?

lynnzal, others seem to think we have a wonderful pennant forming!!!!!!!!
Any views?

Zinc now quoted at over $1500/tonne. $800/tonne+ profit for every tonne GFM produces even after depreciation of the mine costs.

Have been offline now for 4 weeks and was very happy to see the progress this share has made straight through my 42p sell price.... Any idea how much further this could go in the near future?

dibbles, here's an earlier post re. pennant

lynnzal - 17 Oct 2005 11:05 - 650 of 665
Yes Andy, nice bullish pennant forming and could end up as a triangle correction (a,b,c,d,e) as opposed to an irregular flat correction (a,b,c). That said, I cannot entirely discount a last push to the downside (45.75~42p). As I mentioned before, the rules only change for me if and when we trade over 55p.

explosive, GFM still appears to be in a strong uptrend and once the consolidation/correction is finished (see above), I would look for the next impulse to target 64~66p area initially.

Regards
Lynnzal

lynnzal, thanks.
mm's seem to be over doing it a bit today!!!!!!!!!

Zinc pauses for a breather


Metals Insider - 17 October 2005



MI WEEK IN REVIEW: Zinc took something of a time-out last week after hitting the next big number target of $1,500, basis three-month metal. But the funds continue to like this one and with upside momentum on copper in particular stalling for now, there's a renewed sense the good times are rolling again for the zinc market.



Three-month metal initially built on its momentum of the previous week to touch the $1,500 level on both Tuesday and early Wednesday before the urge to take some profits outweighed fresh commitments from the investment community.



That's hardly surprising since the CTA systematic community alone had lifted its collective long exposure to zinc to 80% and above in the first day or so of last week.



But the pull-backs were generally shallow with plenty of players ready to commit to the uptrend at slightly lower numbers and the relatively weak Friday close of $1,475 still amounted to only a $3 week-on-week decline.



One feature worth noting, though, was the expansion of the contango across the nearby structure of the LME market. The benchmark cash-3s spread ended the week valued at $18.75 contango, compared with $8 the previous week.



That reflected rising expectations that the good delivery suspension of all that metal in New Orleans may be lifted in the near future. The LME finally detailed the process for reinstating the metal and one optimistic player even cancelled 75t on Thursday at the hurricane-hit city.



The contango says there is still a lot of metal in the LME system to be worked off before stocks fall anywhere near to the pinch-points experienced by copper and nickel earlier this year but zinc is back in favour with the fundsmore than any other LME-traded metal right nowand all the fundamental signals are sending them a green light.

Lynnzal, Do you reckon that we have had the chart dip (yesterday) you forecast and can now bank on GFM regaining the ground it has lost since its recent high?

A chartist poster on another bb who has been watching GFM closely because of the pennant forming is now a buyer.
Positive if you believe in chart signals only I suppose.

Sharesure, Wednesday's dip does not satisfy my call for a pullback as I was looking for it to trade under the 45.75p low. It is 'possible' that the correction could be over as it had already met initial corrective objectives when it reached 45.75p, but the length of time that pullback took represented a problem for me (ie. too quick). Therefore, I assumed a most likely scenario for the pullback (detailed elsewhere on this bb) and came up with 45.75~42p as a buying zone.
I'm still not entirely convinced though and will either venture long below 45.75p or above 55p.
The pennant idea seems to be a bit of a mess. We broke the topside when we traded 53.5p and the downside when we traded 47.25p, so how many times do people want to redraw the lines?

Note, the longer-term bull remains intact over 38p.

still trading well under the vol 50d ma

Lynnzal, I will look fwd. to GFM going over 55p then! As of next monday, 24/10 news on gold drilling progress should come through as the directors return from their hols. By my estimtion the actual drilling will have been finished and so it is down to how soon the results can be interpreted. Independent assay results are likely to take longer.

Thanks for the info Sharesure, is there any standard timescale for these results to be published by?

Lynnzal, Not to my knowledge, but if drill results are available and are such that they would affect the sp either way then GFM would have to publish them under SE rules.

According to the Times zinc is higher yet again. I'd understand GFM's sp if the shares were ahead of events but in my view they aren't; so the constant rises followed by weakness seems at odds with reality. I am expecting to see GFM issue more gold drilling news early next week.

Just nervous times Sharesure imo.
Also gfm must be a daytraders dream with the way its been fluctuating this year, even I've predicted many of the moves and I'm no chartist, just been too nervous to trade it in case news comes in and I miss the big move...