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.

Evening all, I wonder whether we are finally chasing the zinc price or have news on the way?
Drilling news can't be far away now even with the lab backlogs?

the next set of results should prove awesome - dont miss the boat

Been on board for ages now and this share keeps getting better. I'm sure we'll see 60p for Christmas.

54p today and on track.

Looking like an imminent breakout, following the zinc price at last.

Probably a daft question, but does anyone have any sort of rough idea as to high these shares could go eventually, price wise ?

I'm a chartist and a breakout from a pennant should rise by the lead up to it, which was 20p.
So I'm looking for 74p before I start getting twitchy. Fundamentals look good so no reason why the chart shouldnt perform....patience is called for though as nothing goes up in a straight line! (DYOR)

Tudwick, GFM has staed that they want to increase the ore throughput to 500,000 tonnes pa. If that gives at 12%, 60,000 tonnes of concentrate, at the current price they would be making $1,100/tonne+ profit, ie $66,000,000pa+ profit. The mine life is well covered beyond the 14 years originally estimated. Then there is the prospect of a gold strike. There will be a need for some extra capital investment in the short term to get the production doubled but GFM should have a healthy bank balance to fund that itself. Quite an impressive position to be in.
The answer to your question is what multiple you put on those earnings; I'll leave that to others but it implies a considerable upside from the current sp is easily possible.

ss - better than t-leaves!!

Check out the new Griffin Mining video at... http://www.griffinmining.com/video/griffin_webvideo_dec2005.wmv

016622 - 74p from a chartist, and your time frame???

The video on the web site is rather good!
staying long GFM, not long to go now IMO before gold report back. Then 70 p plus hopefully.

Griffin, thanks for the prompt on the website video; agree it is impressive and reassuring to see that the mine is producing 100 tonnes of concentrate each day; that means $120,000/day profit at current prices.

I think 70p+ on Zinc production alone, Even more when Zinc production is increased by 150% next summer.
These are just my estimates without gold, But with a gold mine looking more likely well all i can say is WOW.
PS i know i sound very optimistic but im a big fan and have followed this company for over 4 years now, it is by far my largest holding.

Griffin - This company is turning into a dream, I have also been following Griffin for over 4 years and it is also my largest holding by far. It almost seems to good to be true. Perhaps it is!!!!! Are we getting carried away?
If I understand correctly only a very small part of the licence area has been explored, has anyone picked up any official comments about the remainer of the area? or have any views.

One key thing for me is the Company commissioning on time and below budget.. .means they have credibility and are thinking of the shareholders. I have a feeling that we may get a Xmas present in the form of an RNS outlining the expansion plans for next year. The expansion is key to the directors options being granted ,so it will happen sooner rather than later. Tagged on to that RNS I believe we shall hear about the small matter of the gold, silver and other metals.....interesting times.

workman, you only have to look at the production figures on their website cf production costs to realise that this sp has plenty of room to rise just on what they are doing now, let alone exploration. It's one of the 1% of mining prospects that manages to go from explorer to world class miner.

Nice advance in GFM today; have not heard any particular reason why it should go so well today, has anyone else on this thread?

ZOX as gone up today so might be Ziinc price.

Aldwickk,Could also be the rising Gold price