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.

Investors seem to have info from to many different scources, No one knows who is accurate, Its better to wait for official news from Griffin.
In the mean time just remember,This company is mining Zinc in a Zinc bull market, with no debt, no hedging, and planning to increase Zinc production, All this with the added bonus of gold.
(Me thinks we should buy some more)

Good write up in this week's IC - probably explains the 4% rise today.

rgrds
gk

Here is the write up from Investors Chronicle,

3 February 2006 62p - Aim - Compared with some of the young upstarts that have jumped on the China bandwagon over the past few years, Griffin Mining is as old as the hills. The company has been trying to get its key Caijiaying zinc-gold asset into production since 1987, after a Griffin director secured the property through personal connections with a notable party bigwig. Production finally started in 2005.
In fact, operating in China hasn't been easy, even for the majors. But things are now improving - several of Aim's juniors are in the country doing good business and China itself is developing a huge thirst for raw materials.
Demand from China has been the primary reason for the recent bull market in metals prices. Zinc, Griffin's primary product, has been something of a laggard, but is now starting to catch up fast. In the past two months, the zinc price has risen to over $2,000 a tonne - more than double the level five years ago. With a 450,000 tonne global demand deficit in 2005, and China now a net importer of zinc, the country is keen to boost home-grown production.
All this has made Griffin's plans to produce 44,000 tonnes a year by 2008 an attractive proposition, both to investors and to local authorities. It also means that cost overruns and other difficulties encountered during the mining start-up phase have been mitigated by the vastly increased margins. Broker Collins Stewart believes that, as Caijiaying hits full production levels in 2008, costs should fall from the current $1,100 a tonne, including smelter charges, to $750 a tonne.In addition, gold production is likely to commence towards the end of next year, so zinc isn't the only string to Griffin's bow. Gold has been exceptionally strong in the past few months, and has acted as a strong support to Griffin's share price in recent years. The planned 40,000 ounces of gold production each year should add $7m a year to top-line revenues from 2007 onwards.
Much depends on metals prices, and some brokers are more cautious than others. HSBC, for example, warns that the current strength in gold isn't sustainable. But, for every bear, there are plenty of bulls, and most analysts have been revising forecasts upwards rather than downwards in recent months.
Collins Stewart's basic scenario for Griffin, working to a long-term zinc price of $1,102 and a long-term gold price of $400 through to 2012, looks sensible. On that basis, assuming a 1.5 times multiple of net present value, the broker sets a target price of 85p. In terms of cash flow, the broker forecasts sales of $45m for 2006, and $57m for 2007 as ore-processing capacity rises, meaning that Griffin trades on a forward cash flow multiple of 16 for this year, dropping to 9 for next year. That's relatively cheap, given that it factors in both exploration expenditure and a maiden dividend.
The company is fully funded, too, carries no debt and will cover all further development costs through its cash flow. And, with 56 sq km of exploration ground around Caijiaying to investigate, there's also some potential speculative upside.
The situation in China may yet change, but with the Olympics coming up and the country wanting to showcase itself as a rising economic power, most analysts think that's unlikely. More serious for Griffin is the possibility that the metals bulls may have it wrong. But even in the unlikely event that gold falls back to $350 and zinc hits $815, Griffin Mining will still be a viable business. Buy.

Sounds good to me,
Regards to all,
Griffin.

well i like grffin, but am not aware they have anounced they have found gold in suffucient quantity to start their own seperate mine!!

is the article being presumptious?

or have i missed some news?

Singapore (Platts)--6Feb2006
China's Shaanxi Baoji Dongling Group is scheduled to start commercial
production on its new 100,000mt/year zinc ingot line in April, and is expected
to ramp up the line to full capacity three months following the startup, a
company official told Platts Monday.
"We are accumulating feed supply now. Concentrates are quite tight, so it
is taking us longer than expected to obtain sufficient raw materials for
startup," he said.
The company completed construction and started trial production on the
line as planned in December 2005. It had orginally aimed to start commercial
production by the end of January 2006. "Our trial runs are completed. We are
only waiting now to ensure we have enough feed for startup," the official
said.
The new line, on which work got underway in November 2003, has lifted the
company's 99.995% zinc ingot capacity to 160,000mt/year from a previous
60,000mt/year, and represents phase one of the company's 300,000mt/year zinc
smelter project. The entire project, to be constructed in three phases, is
slated to be fully completed within five years.
"We are now planning to start work on another 50,000mt/year expansion. We
aim to ready that in about three years to give us a total
200,000-210,000mt/year capacity," the official said. "The remaining
100,000mt/year will be the final phase and we will work on that once all the
earlier lines are completed and working smoothly," he added.
Forn 2006, Baoji Dongling has projected an output of about 80,000mt from
the new line and 60,000mt from the old line, taking the total to 140,000mt for
the year. The company produced between 60,000-70,000mt in 2005. "Our former
capacity was 60,000mt/year but we can always exceed that slightly," the
official said.
Baoji Dongling currently sells its output mainly to the domestic market.

company official told Platts Monday.
"We are accumulating feed supply now. Concentrates are quite tight, so it
is taking us longer than expected to obtain sufficient raw materials for
startup," he said.

GFM seem to have no shortage of customers in China , don't think the Chinese will be please to see GFM exporting zinc concentrates.

>>

I saw that IC write-up. The thing that strikes me is the absurd long term price assumed for Zinc. It is assumed that the price will be at less than half the current price. I would accept that prices have spiked, but IMHO it will be years before ther is any chance of them coming out of orbit because the world mining scene has got so much ground tio make up and supply levels on the LME are getting to critical levels. Also, given the finite nature of metals price falls of over 50% may never happen at all.

Roll on Griffin and ZincOX.

rgrds
gk

Griffin Mining Ld
08 February 2006

8th February 2006



Caijiaying Regional Exploration Program
Reverse Circulation Drill Results



Griffin Mining Limited ("Griffin" or the "Company") is pleased to announce the
results of its 2005 regional exploration program of areas surrounding the
Caijiaying Mine (the "mine") in northern China.



Zone II (East)



A new zinc target was discovered at Zone II (East), 1,200 metres from Zone III
where the mine is in operation, by an IP geophysical survey completed by Griffin
in 2004. Drill testing of this target has resulted in a new discovery which
yielded RC drill intersections of:

52 metres @ 5.45% zinc from 72 metres depth, including
12 metres @ 12.35% from 72 metres plus 4 metres @ 7.61% zinc from 92 metres


A second hole of a similar orientation yielded:


12 metres @ 5.82% zinc, including
8 metres @ 9.82% zinc and
8 metres @ 116 g/t silver.



Further work will be undertaken this year to ascertain the orientation of this
mineralisation.



Zone II (Central)



The main part of Zone II, 200 metres to the west of Zone II (East) has also been
confirmed as a precious metals prospect with significant gold and silver
intersections of:


10 metres @ 2.21 g/t gold and
8 metres @ 228 g/t silver from 171 metres.


This suggests much more precious metal enhancement than was obvious from
previous work.


The zinc intersections from this zone are mainly in 4 metre composites and are
in line with the previous Chinese results including:


4 metres @ 9.23% zinc from 116 metres;
4 metres @ 8.16% zinc from 116 metres; and
8 metres @ 5.06% zinc from 120 metres including 4 metres at 8.96% zinc
4 metres @ 5.89% zinc from 132 metres



Significantly, it was not possible to test the 1 kilometre long area between
Zone II and the mine at Zone III due to newly planted flora. A long lead time
is required for forestry permitting and land clearance to drill in this area.
This should be obtained by the spring, ready for further follow-up drilling in
the summer.



F45 Fault



The primary target of the major F45 Fault zone, 1 to 1.3 kilometres south of the
mine, has been confirmed with significant gold intercepts recorded in two holes
900 metres apart at about 150 metres depth. The two intersections recorded
were:



4 metres @ 3.96 g/t gold; and
3 metres @ 4.24 g/t gold.



As both of the positive results are from a similar depth and quite far apart,
they indicate the level of gold precipitation in this target is similar to the
level where gold is currently being proved in the mine by the ongoing
underground drilling program. Defining the level of gold precipitation is an
important step in targeting epithermal gold deposits and was a major aim of the
survey.



As gold results continue to emerge from the mine underground drilling program,
the geometry and nature of the gold mineralisation is becoming clearer and this
knowledge is expected to impact favorably on the ongoing gold exploration
program in the region.



Conclusion



The conclusions from the summers drilling program are preliminary as it will
take considerable further study to fully evaluate the large amount of data now
to hand.





Mladen Ninkov, Griffin's Chairman, commented on these developments as follows:


"Although it is unfortunate that the results from the reverse-circulation
drilling programme, which was completed in October 2005, were substantially
delayed due to the extraordinarily slow delivery of results from the assaying
laboratory, it has been worth the wait. Caijiaying continues to fulfill
expectations with the continuing discovery of further mineralisation which has
every possibility of developing into economic ore capable of being processed
through the existing plant at Caijiaying. This is another positive result for
the shareholders of the Company."







Further information



Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772
Roger Goodwin - Finance Director
Griffin Mining Limited


Andrew Smith/Martin Eales Telephone:+44(0)20 7523 8350
Collins Stewart Limited


Hugo de Salis Telephone: +44(0) 20 7242 4477
St Brides Media & Finance Ltd



Griffin Mining Limited's shares are quoted on the Alternative Investment Market
(AIM) of the London Stock Exchange (symbol GFM).

The Company's news releases are available on the Company's web site:
www.griffinmining.com





--------------------------


This information is provided by RNS
The company news service from the London Stock Exchange

Even more mineralisation, sounds very positive,
This is turning into a real solid mining house,
Looking forward to year to Dec 05 results.

Hope you're right, Griffin. Do you know when the results are announced?

Wish these would start showing signs of improvment! anyone have any good news about these?

griffin - post 848 I agree completely, no reason for the sp to fall out of the 60 zone and personally I expected on release of the RNS they would rally towards the 70 mark. Only conclusion I can think of is profit taking however early in the game... Any other suggestions?

Pma68 - Final Results due april/may i think.

explosive - i think the sellers were short term traders hoping to make a quick profit from an RNS that was expected a while back, but are now moving on.
But im staying with these for the long run as profits are now coming in and rising with plans to increase production, even more mineralisation/exploration potential and no debt. All this makes me feel that this is a well run solid mining company and that the share price has much further to run.

nice to lose the short term traders and their frantic postings
agree, a solid hold
get some more, tuck em away and wait...

Amities / l am absolutely seething . This is a very UNIQUE stock . A junior mining company with NO DEBT and AN abundance of a commodity of which there is a dearth.And a dearth that will last a number of years.Believe me . Zinc is virtually unrecyclable. This is a fiscally robust company with solid management { all with substantial personel holdings }who have addhered to their business model since inception without being sidetracked by the lure of yellow metal ..They have a cheap workforce,. a rapidly emerging infrastructure with virtual towns growing around the mine . . So- all in all - this should be a gravytrain. A one way ticket . .So why the retracement . A modicome of profit taking and T+ 10,15,20 settling , l agree ; but 90% of it is " Naked shorting" on the Kraut exchanges from which you cannot delist .. Friends in Bremen/Berlin and Stut tell me "shorting" to the tune of 8 million is in PLACE NOW .Mostly Pl's . ...l CANNOT understand the legitimacy nor the basic morality of such a NON RISK form of shorting .............F*** them . Quality tells; and money talks ..Await the results ! ....@+ J........As for a divi ? id prefer a share buyback !! ,,,Finally for all you dreamers ..lol Zinc @ 850 .....THIS is a WAKE UP call . .!

TFC, Agree that the shorting problem is irritating but in the end, when they have to close out, they will exaggerate the recovery in the sp. The real crime is if the shorting is accompanied by lies about the company, as last time when the Germans were saying that GFM had no mine etc. etc. That would be hard to repeat this time as GFM have a highly productive and profitable operation which everyone can see for themselves if they care to go to China.
This is a very sound mining company in my view producing a metal which is in short supply, with the added spark of a gold deposit. As for the directors owning shares, I agree that the chairman has always boasted a large blind trust holding, but I would like to see some more overt buying from the mgt.

For what it's worth, the charts look like it's a good time to top up or buy in.

good head and shoulders coming up imho.

Silvermede - post 856... Thats the spirit, a great time to top up or buy in. Re-mortgage your house and chuck the lot in.....

explosive, remortgage? never! this is speculation not investment and if people don't know the difference they shouldn't be buying shares. Not trying to ramp at all. My comment was made because the Sp had fallen to around the level of previous support appears to be turning and the RSI and the slow stochastic look to be moving in a positive direction as well. Either way I like the this share and am in for the long term, provided all the indicators remain positive e.g. demand for and price of Zinc etc. More than happy for you to keep me in check though :)