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.

High expectation of the gold result, press interest hyped the price and no news is good news, not so sure - umm getting twitchy, trouble is so many of these falter and wouldn't they have announced by now, time to offload a few?

Sold all mine yesterday @ 63p, hope to get back in before any good news its a bit of a risk i know.

Hmmm I still think Griffin has a long way to go and I am holding onto my shares. At some point I intend selling some of them but I haven't reached that point yet.
Di

Dyn, I hold the same view. I knew we'd have a similiar retrace off the recent high but I don't beilieve we'll see any lower than 60p, hence didn't sell with the aim of buying back too much lower.

GFM has too many things going for it to support a higher price. Zinc should shortly hit the $2000/tonne, GFM will likely announce a timescale for more than doubling production and some day soon the assay results for their 2005 gold drilling programme should be available. As if that is not enough they may yet attract the attention of a predator; if they do the take-out price would need to be a lot higher than 65p. Risks: Recession, Govt. policy change? Both seem very unlikely. Membership of the WTO is too important for China to risk upsetting foreign investors now.

Good end to another lively week, looks like GFM has a real energy behind it now.

Amities / lt is quite intolerable that GFM are listed on several Europeon bourses. This practice MUST be stopped . lt leads only to "naked" shorting . For at least three years it has beseiged GFM.hence the stocks relative volatility. But recently the "shorting " of a tad shy of 8m illustates a sysyem gone mad . Buying in Stuttgart @ 3.15 euros .Selling in Frankfurt @ 3.47 euros and finish of the day by buying in Berlin @ 3.08 euros . ..GFM say they have delisted from these exchanges but obviously not. As far as the business itself goes its first class. A state of the art , producing , cash generating company with no gearing . No debt !!! What more could you want ? Being virtually non-recycleable Zinc is the one of the hard commodoties truly in short supply. Not stored away secretly as was going on in China recently reg poor quality Copper. .The mines zinc alone justifies a 80-100p s/p, and with the infrastructure in place to vastly increase production if need be l would be surprised if GFM is not 100p+ before the end of 2006; and thats discounting the gold and silver and a vast hosts of commodoties that GFMs geologists are examining now. Truly a case of the old adage that from small acorns do geat oaks grow . This is a world class find @+ J

TFC, Agree with your take on GFM - it's a great company and with sound mgt.; it will just get better and better. As for listing on overseas exchanges, this is not something GFM can do anything about. I tried to help them once by getting the LSE involved and they confirmed that there is nothing they or the company can do to prevent it.

Well I think I'm safe to say that the 64p sp is holding there or about very well and with no RNS either.... Any trading update released must be of promising news as production gears up... Should all equate to a stable higer sp come early spring.

Some time soon I expect GFM to be announcing a timetable to double production - not a difficult process for them as the existing plant was designed with that in mind. They need to crank up production in the early years to maximise the tax break the Chinese Gov. has given them.
As for any gold assay news maybe that is being given less priority for the timebeing and would only rapidly be produced should a bidder emerge. In that respect some of the recent trades look interesting.

A poster on the other bb got e-mail yesterday saying that assay results are back.
The companies geologists are going thru them and will write a report by the end of this month.

Dibbles - thanks for the post this is news to me. Was there any indication if the geologists are independant I would have thought so and which companies geologists are reporting on findings?

Dibbles that's good news as they were having difficulty finding an independent to do the work - apparently there is a shortage of independent facilities worldwide

Anyone know the name of the independant?

The assay results have now been recieved on the RC drilling programme, having been delayed by a lack of capacity at independent laboratories in Beijing and in Australia. The results are now with the company's independent geologists who are preparing a report thereon. This report is expected by the end of this month whereupon Griffin will make an announcement.

Griffin has no other news of note at this time. It could be said that no news is good news.

yours sincerely, Roger Goodwin.

Well if thats not the voice of confidence then I don't know what is....

explosive

http://www.sgs.com/ GFM have used SGS Perth before.

Thanks AR

13 Jan 11:30
Zinc set to smash records as demand grows
Economic Times - ZINC prices are set for strong gains this year as fast-growing Chinese demand and a global shortage eat into stocks, analysts have said, as the metal soared above $2,000 a tonne for the first time ever. But they said zinc - which in percentage terms rose in value more than any other metal on the London Metal Exchange last year was vulnerable to any wider sell-off by funds that have ploughed money into commodities...