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.

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 :)

Does anyone else think that Shares magazine has never really understood GFM? It was slow to get in on it, and now quicker to suggest moving on, albeit with a comment that GFM still has plenty of potential. The editorial staff on the magazine are an odd bunch sometimes!!!

Sharesure:
Why are surprised at attitude of Shares mag? Sometimes they are allowed to behave like stock market gamblers, surely - that's what they are! If a stock, however interestin, speculative, intriguing, if it doesn't do anything for a while, despite making sign gains previously, they move on. Most have the attention span of a flea, surely. Personally I agree with you, the stock is a little more than pure speculation.

Sharesure:
Why are surprised at attitude of Shares mag? Sometimes they are allowed to behave like stock market gamblers, surely - that's what they are! If a stock, however interestin, speculative, intriguing, if it doesn't do anything for a while, despite making sign gains previously, they move on. Most have the attention span of a flea, surely. Personally I agree with you, the stock is a little more than pure speculation.

Hello all

I dipped my toe in the water today with a 20k buy. I will be paying for them and keeping them until the bull run in commodities is over in about 2015.

Alfred

Not got long to go then its 15:22 already.

Silvermead - Thanks for your post 859, I agree...

TheFrenchConnection - post 854 "Zinc is virtually unrecyclable." Now when I first read this in your post 854 I was unaware if this statement was indeed true. On further investigation if would seam zinc is recyclable and has been recycled for decades as per below link.

http://www.zinc.org/publications/recycledforever.html

Now either your post is incorrect on this matter or I'm missing something. Can anyone clarify??

The last update from shares mag was all to play for and lots more to come?

Amazing turnabout by them although to be fair they do still state positive for long-termers!!!!!!!!!

Explosive, It is generally reckonned that there are many practical and economic reasons why zinc is not capable of being economically recycled - unless of course the price rockets - at which point maybe some of the drawbacks will be overcome.
Dibbles, Shares mag. also suggested locking in some profits - not advice I would follow on GFM at this stage as I have come to doubt how good some of their current team are.