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.

deemule,

Ok thanks.

Did he say if he would be contacting them for clarification?

tipton11,

And a share buyback would help defend the company against a hostile takeover.

There are plenty of long investors sat on shares not looking to sell until at least a 130p sp is hit. A dividend would secure more into GFM. I have faith in the board and wouldn't want to see this one be taken by a hostile bid....

Andy

He said that they had no formal discussions, but added that they had spoken informally with various companies at conventions etc and intimated that there could be more than one interested party and GFM would be very attractive to said party or parties , but wouldn't add any more i have to be honest i didn't ask if he was contacting them, if you give him a call he is very easy to chat to, i found him very pleasant.

Andy...surely only if it put up the price of the shares...all bybacks do in my opinion is they make the eps better but seldom effect the price... do you also hold VOD like me?

The Daily Mail Midas column says buy GFM..I'm glad I topped up when GFM @ 68p a few weeks ago. up another 6.75P today :-)
Di

tipton11,

No I don't hold VOD, I tend to concentrate on AIM junior miners, and oil and gas companies.

If they buy back a reasonable tranche of the shares, EPS clearly rises, and I would expect a corresponding rise in P/E, and, therefore, shareprice.

Di,

My top up recently was well timed too!

Makes a change, lol!

Are GFM going because of a buy-out or back to their original high value.
I held them for two+ years but sold in May at 92p and am waiting to back in again probably September

Been holding since the 33p days, so should get some tax relief when I come to sell. Price should reach 120s in the next few months if factors remain positive. Many analysts think zinc is currently depressed like copper last year, returns look even better with this consideration.

I hear tell that man on T1ps has taken out a short on this company.
I hold and I agree with MIDAS in the mail that the future looks ROSY.
Cheers.

Porky,

Do you mean Simon Cawkwell [ E K ] ? what reason did he give for going short.

Perhaps he looked at the miniscule EPS. We are in a classical over-valued territory IMHO

SMWAK

some good info, thanks guy's Afzal

UP IP WHEN THIS WAS ENTERED

slapmewithakipper, is a well known de ramper who posts on other bb's so don't take any notice of his postings.

aldwickk,

Correct, is it our old friend Bomphrey per chance?


ps

I have just used the "SQUELCH" facility here, and it's quite neat, as you can't see that the "squelched" user has posted at all!

(Unlike over the road, where you can see their name with a "filtered" after it, so you can see they have posted something.)

Yep, deffo Bom. T**T.

This share is a pile of shite.

Strong sell

so you're short then slapper & now squellched! People are lot more savvy on this BB so grow up!