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.

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...

Cannot understand the drift in price; zinc price is so strong now + the company are aiming to give their gold drilling assay assessment and also a timetable for doubling their zinc output during next week.

SS,

If Zinc price discounted then at face value suggest Traders versus Investors taking a profit as Charts suggest SP to go down further unless News arrives. I'm in for the long term.

Profit taking appears to be widespread. My portfolio, although 31% up, looks like a blood bath for the second day running.

Shares magazine, page 16, has a 'BUY' recommendation for GFM. Mentions the possibility of some upbeat announcements over the next couple of months - think they must mean the next couple of weeks. It took Shares a long time and a lot of persuading to appreciate the benefits of GFM.

and a 100% share rise in 2005!
better late than never...

Shares magazine could have recommended GFM even earlier - there were enough letters in the letters page saying how good GFM was months before they latched on.
Anyone got an up to date zinc price chart?

Sharesure hi, to be fair they did tip them in 2004 in an article called " our favourite ten miners" or something like that.
Also again last year at 35p just before we broke out to the next range.
Zinc was around $0.97/lb earlier.

Shares Magazine did have GRIFFIN [at 4p] as its play of the week back on 22nd March 2001, then there was a long silence! IC also had them as a buy the same week. Its been a long wait but very rewarding! It looks like its far from over so I am sticking with Griffin.

Guys,

BIG NEWS

Yes you can trade GFM in a share ISA. I have just purchased stock in Griffin in my share ISA at TD Waterhouse. They are duel listed on the German Dax market.

Guy's,

Just a quick addition to ISA info. If you deal with TDW as I do. When I telephoned customer services they initially had the stock on 'block' for trading in a ISA. Ask to be put directly to ISA desk and they subsequently checked for duel listing in Germany. So be persistant of in case of initial knockback.

The good news is this is going to save me tax
The bad news I have to go to the dentist in 2 hours!
Good luck guys,

Not usually one for rumours, however Roger is supposed to back from China on the 24th and the long awaited RNS will be released on that day.

As always take I take these with a pinch of salt, would be especially nice if Zinc hits $1 on that day.

looks like the rumour may be right....

That fits with my understanding. With the zinc price going like a train GFM has plenty going for it.