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.

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

Mainly the zinc price untill we get a update on the gold or even bid rumours again.

Also Chinese goldmines GGG has come out with promising assay news today; maybe that has attracted interest in China generally. Certainly looks a solid rise.

CEY as had a good run today, but a can't understand why KYS as not moved up, two trades today both sells.

Posted on ad..n

chipperfrd - 12 Dec'05 - 14:34 - 3670 of 3685


Everyone on here seems to keep thinking that there must be some 'hidden' reason for the current strength of the sp.

I know that a T/O must be possible and there is much anticipation regarding gold, etc, but why not just accept that GFM is undervalued on it's Zinc alone!

There is a paucity of pure Zinc producers on the LSE so a rising Zinc price should ensure that money flows into GFM stock as a geared play on the zinc price.

Simplistic maybe, but worthy of consideration.
Chip.

Just to add my 2pennies worth........all the Gold explorers/junior miners on my watchlist have seen good gains today on the back of the current pog.

just look at the last time averages and macd took off!

Extract from The Independent today:

'Griffin Mining rose 4.5p to a fresh all-time high of 61.25p amid strong institutional demand for the China zinc producer.'

Albeit only a few lines, it has made the National Press, let's hope it continues as the City may now have woken up to the long term potential of GFM

Silvermede - Agree with your post above. The city does seam to have more eyes looking at Griffin than in previous times.

Yahoo Finance article
http://biz.yahoo.com/ic/122/122136.html
Griffin Mining is not a mythical beast, but it has swooped down in China to develop zinc and gold mining projects. Its main operation is a joint venture (with Chinese group Caijiaying Lead Zinc Preparatory Committee) in the Caijiaying zinc project located near Beijing. Construction was completed on the project in 2005 and it has commenced production. The company is also scoping out other projects in China. Trellus Partners holds a stake of more than 10% in Griffin Mining.