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.

noted...

Was this in the IC? Haven't seen it yet. Hope we push through the 40p barrier considering the favourable buys v sells today.

Was this in the IC? Haven't seen it yet. Hope we push through the 40p barrier considering the favourable buys v sells today.

Oakapples,

Yes good volume and a decent rise, ZOX up 10p too, I'll check the price of zinc!

Yes zinc up a bit.

And gold.

Sharesure
GFM is not in the IC today.Good rise lets hope it holds.

Thanks, grahamsh. In which case the buys v sells ratio looks like more solid evidence that a few others are catching on to what is happenning here. I reckon we have 4 to 6 weeks before much news on the drilling comes through. One advantage GFM has it its own on-site assay facility which they can staff with independent assayers as well as their own; it makes it all the quicker in evaluating drill cores because they won't have to go abroad anymore, speeding up the accuracy of the drilling process. Reckon this should turn out to be a nice ride from here on, we plus the mgt deserve it.

The old spread is getting a bit evil
bid 38.5p
offer 40p!

terrific buy signal to finish the week on

A break through 40p should come next week and there should be plenty of support to keep it there as drilling news gets closer and also as each week goes by GFM builds its cash pile.

Suppose it was inevitable that last week's rise would cause a shake out at the start of this week; still think the move through 40p is imminent if only because of the cash GFM is piling up. It gives the company a lot of room to do whatever they wish, either more extensive drilling or buying in the company's shares, although the latter might be unnecessary in the short term.

It would be good to see us hold above 38p then onwards and upwards from then on hopefully.
Very confident short/medium and long term here though, whatever the end finish today.

Zinc and gold holding up well also, GFM may be timing any potential gold discovery just right.

2nd August 2005


EXERCISE OF WARRANTS



Griffin Mining Limited ('Griffin' or the 'Company') has received notice of the
exercise of warrants over 75,000 new ordinary shares in Griffin at an exercise
price of 0.20 per share for net proceeds to the Company of 15,000. These
warrants were granted as part of an equity placing in August 2003.



Application has today been made for the new ordinary shares issued on the
exercise of the aforementioned warrants to be admitted to trading on AIM, which
is expected to occur on 5th August 2005. Following the issue of these new
ordinary shares, there will be 183,327,731 Griffin ordinary shares in issue.

Not much dilution there then. GFM still does not seem capable of sustaining the sp level; even though one can take a very relaxed view considering its medium term prospects, you would think that all the buyers who were in at sub 3p and wanted to take a profit would have done so by now. Difficult to see why anyone would want to sell at this juncture.

quite right have just bt in @ 37.98 results due 7th sept should make a difference....my usual incompetent operation having watched them on and off all the way from 12p...not to depress anyone by me buying, am showing profit this year.

Tipton11, Good decision. W/O wanting to appear to ramp, the outcome of the gold drilling should prove that you have still got in at a very, very good price. If it was only zinc we were considering here, there is still more to go on that front too, but proving that earlier high concentrate gold finds were not just one-offs is the real prize.

I think we've attracted a few daytraders in recent times but bearing in mind that we had a number of buyers at 39p+ on Friday its just a matter of time imo.
Hopefully we are just pausing for breath before the next assault.

While we get bored here can anyone shed any light on ETQ?