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.

Sharesure,

I think the prospest of a mojor gold find is good also...... The XinQiao Gold Mine is situated in one of the most prolific gold producing regions od China. The Henan Province located in the east-central China is the second largest gold producing province in China with annual poduction of approimatly 864,213 ounces.

Have a look at the below link and website

"http://www.asianstardev.com/project_images/xinqiao.gif"

Its worth noticing that Griffins mine is in the Hebei Province located directly northeast of the Henah Province. The major feature of the XinQiao Gold Mine is a large fracture, which consists of three sets of crack belts. Movement of auriferous molten metallic lava through this fracture resulted in the formation of several gold ore veins. The majority of the quartz veins trend to the northwest, with a small number trending to the notheast. To date, 29 ore veins and 32 ore bodies have been located in the mine.

I think that any major gold announcement at this time will see a rapid sp increase and interest from other big players in the area. It could well be that Griffin have stumbled onto one of these gold veins which to estimate reserves would take some time. The announced grades of gold to date are also comarable with the avereage grades found at the XinGiao Mine ranging from 0.6 to 300 grams of gold per tonne, with an average grade of 10.25 grams of gold per tonne.

Has anyone already looked furhter into this or done any research regarding mining projects and gold in the same area/range?

good price to top up, news can't be far away

looks like a few have rs

whoops 4825.00 someones going to be mad. 25k x 8 interesting

FOCUS: Zinc Seen As 06 Price Star But Hampered By Copper

(This story was originally published Thursday)
By Elisabeth Behrmann
Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Zinc may be the star on the London Metal Exchange in 2006 yet its outright price performance will be hampered by expected declines among other metals such as copper and nickel, market experts said this week.

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Speaking ahead of LME Week that kicks off here Monday, analysts and industry participants said price gains in the metal, used primarily to make steel resistant to corrosion, will be restrained because the LME's flagship copper contract is forecast to fall sharply next year, dragging zinc down despite its robust fundamentals.

"Zinc is one of our favorite metals, a late performer in the metal cycle," Robin Bhar, base metals analyst at UBS in London, said. "Supply is constrained while demand is forecast to rise."

The LME's three-month zinc contract has already moved to an eight-year high of $1,530 a metric ton, up a quarter since the beginning of the year, aided by copper's climb but also on its own tightening fundamentals, analysts said. The 2005 average is estimated around $1,300/ton.

Analysts see zinc prices range next year between $1,280 and $1,520/ton. Though little changed in nominal terms against current prices, those forecasts look healthy when compared with expected price declines elsewhere in the LME complex.

Zinc demand is expected to outstrip supply by some 200,000-300,000 tons next year as few new mines are expected to enter production, analysts said.

"The concern for zinc is from collateral damage from copper. I forecast zinc prices at flat into 2006, but that's because copper is forecast to fall by 27% or more," base metals analyst Nick Moore at ABN Amro said.

Miners and refiners tend to firm up negotiations on charges to turn zinc concentrate into refined metal on the sidelines of the International Lead and Zinc Study Group meeting here this week, with benchmark treatment charges emerging weeks later.

Negotiations between zinc metal producers and consumers will also take place over the next few weeks to agree European zinc premiums over the LME cash price for annual contracts.

Early indications point to a hike of between $10 and $20/ton from the 2005 benchmark premium of $95-$105/ton.

"There will be serious negotiations during the next weeks and treatment charges will fall sharply with smelters guarded for double-digit figures," analyst Graham Deller at metals consultancy CRU said, adding that high zinc prices should offer smelters some reprieve.

Some industry sources said charges might even fall below $90/ton.

In 2005, treatment charges have plummeted to record lows of $120-$126/ton, cutting revenues for smelters.

Analysts anticipate a number of closures for 2006, leading to the concentrate shortage easing.

The shortage, due to years of low investment in new mines, recently forced spot treatment charges into negative territory for the first time, even though special contract clauses equated the charge to around $55/ton.

The concentrate shortage is forecast to ease from April 2007, when Apex Silver Mines' (SIL) San Cristobal project in Bolivia is scheduled to start production. Its projected output is 270,000 tons of zinc in concentrate annually.

Fundamentals for zinc improved further in the third quarter as strikes reduced an overhang of exchange and producer stockpiles that had hampered rallies in the price.

An 11-week strike at Teck Cominco Ltd.'s (TEK.MV.A.T) Trail operations in Canada and a labor dispute at Falconbridge's (FAL) Kidd Creek plant in the period helped remove stock and should pave the way for rises, analyst Ingrid Sternby at Barclays Capital said.

However, zinc inventories still remain above critical levels of consumption, ABN Amro's Moore said.

High producer stocks and an estimated further 150,000 tons of off-market stock mean zinc's fundamentals aren't strong enough to resist weakness in other LME metals, Moore added.

Aldwickk - Another gloomy economists review on things to come... Mind you there reports always sound like this LOL.....

I see it's been a bit quiet here since I've been away on vacation. Still it's not suprising given the sideways meandering of GFM. Needless to say, my analysis has not changed..here's a re-cap from a couple of weeks ago.

lynnzal - 20 Oct 2005 14:59 - 671 of 690
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.

Morning lynnzal,
I hope you are right as I now have further funds itching to find a good home..
As far as quiet here goes, I can't speak for everyone but I've been busier with CHP recently, thanks to Sharesure encouraging me to research them.

Thanks dibbles,
I'll take a look at CHP and post any view on the relevant BB.

Lead and zinc seen in deficit through 2006 - ILZSG
LONDON: The deficit in the zinc market is expected to grow in 2006 to 430,000 tonnes as global usage rises to 11.12 million tonnes and China continues to be a major consumer, the International Lead and Study Group said in a statement.

Global demand for refined zinc metal, used mainly in galvanising steel for protecting against corrosion, will remain at around 10.5 million tonnes in 2005 but will increase by 5.7 percent next year due to the rapid rise in China's galvanised steel consumption, the group said in a statement after its October session in London.

ILZSG's report said zinc demand was set to grow by 9 percent in China, 9.2 percent in India and 6.4 percent in the Republic of Korea in 2005, offsetting declines in Europe and the United States.

Chinese imports of refined zinc metal exceeded exports for the first time since 1988 and the study group said it expected this trend to continue in 2005 and 2006.

Global zinc mine supply will rise by 3.6 percent in 2005 by a further 4.2 percent in 2006 to reach 10.47 million tonnes.

''The rises are largely due to recent expansions and mine openings in Australia, China and India,'' it said.

London Metal Exchange (LME) zinc futures for delivery in three months touched an 8-1/4-year high on Monday of $1,566 a tonne as speculative investors bought the metal anticipating stronger prices next year.

Zinc hit a cyclical low of $742 in August 2002. On Tuesday it was trading at $1,521 a tonne.

LEAD ILZSG said rises in battery production were the main driver behind a forecast increase in Chinese lead demand of 19.8 percent in 2005 and 8.7 percent in 2006.

Global lead demand was seen 3.9 percent higher at 7.45 million tonnes in 2005 and 3 percent up at 7.66 million in 2006.

European demand was expected fall, while in the U.S. it would rise.

Refined lead production in 2005 was seen at 7.37 million tonnes, 7.6 percent up from the previous year.

''This will be mainly due to increases in China, India and the Republic of Korea and a 6.6 percent rise in Europe, where increases in Belgium, Bulgaria and the United Kingdom are expected to exceed reductions in France and Germany.'' In 2006 refined lead output was predicted to be 7.62 million tonnes.

The report said that by the end of 2006 it was likely that all of the lead held in the United States Defense National Stockpile (DNSC) would be sold.

''Since the start of disposals in 1993, deliveries of refined lead from the DNSC have averaged just over 40,000 tonnes per year,'' ILZSG said.

Lead was trading at $963 a tonne on Tuesday. The metal touched a contract high of $1,017 in December 2004, versus a low of $412 in August 2002.

A bit of buying suddenly today, down to zinc's performance perhaps?

or news on the way??

More GOLD than they expected

heres hoping, either way, griffin looks good medium to long term....

3 Nov 11:30
MARKET TALK: Zinc Bull Market "Only Just Beginning"
Dow Jones - Zinc bull market "only just beginning" on back of strong fundamentals going forward, should peak in '07, says Standard Bank. Concentrate availability to remain tight till '07, '08 when new mine supply comes through, while robust demand coming from galvanized steel sector, but warns unreported stocks could be at substantial levels which will bring downside risk...

Data is due, has probably been leaked. Expect an RNS very soon.

rob,

If it's been leaked, that damages the credibility of the company.

Happens all the time though, very difficult to stop it

rob,

I agree, it is difficult to stop, but some leak, and some don't!

I prefer those that don't, but this may not be a leak at all IMO.

GFM mentioned gold results by end of October, so people may just be speculating they are now due, and presuming they will be good.

I would like to know how much leveraged money is going into GFM right now, the market does know this of course, and can use that information to it's advantage from time to time.

Miners are habitually late with drilling results, so I would only hold shares that are paid for at the moment personally.

up 2.5% on aday of small sells and a 100k buy after close...looks good for next week,
cheers all!