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.

aldwikk,

We had some problems earlier can you refresh and let me know if you are still having problems?

Ian

oakapples142,

Agreed, especially in the Daily Express!

Hope it wasn't in the Davis Shand column!

He mentioned "rumours of large deals" for MMD/SCO all the way down from 180p to 2p!

heres hoping... I'd like to see a nice steady climb from the mid 50's to di's 2!

016622...don't forget it is only my opinion so DYOR...however, I think it will get there with dips along the way in the next couple of years...so patience is needed.
Di

noted Di!

No plausible explanation has appeared for yesterday's abnormal price movement and there seemed to be no large buyers; curious. As for GFM being capable of fending off what would be an opportunistic bid even at current levels, I think that the mgt. could convince most PI's and, more importantly a good proportion of their institutional shareholders, that they have and are delivering exactly what they promised. If the gold materialises in the way it increasingly seems possible that it will then some of the price targets on here will look very conservative. If you run some figures based on it costing $70/ton to mine and process the ore at this location, and that yields gold at current find levels, plus possibly some zinc too, it is easy to see an enormous potential for the sp, and maybe not more than 12 months away.

Sharesure,

most of yesterda'y buyers were PI's, I agree, and apart form the Express rumour, seemingly nothing tangible to base it on.

The rise has run out of steam for now it seems, and I have sold half to lock in profits, the remainder are virtuallly free now.

I will be watching to see if there's a valid reason to increase my holding, but nothing goes up in a straight line, so I may be able to take advantage of some retracement.

Andy, You may get away with that strategy most times, but if GFM gets another unexplained rise like yesterdays you might find it difficult to catch any subsequent rise which results from either good drilling results or an approach. The mgt. have always been concerned on the latter front ever since a large Bahamas based stake was sold by RAB capital (?) earlier this year and they were not notified as to who the new owners were.

I was told a while back it went to the Chinese

Pull backs are just part of the upward trend, nothing to worry about. The whole market looks rotten today. Even GED hasnt risen today and thats remarkable in itself.

cheers GF.

yes, just a tad too vertical at the moment!

016622,

it's almost reassuring for a small drop, I don't like precipitous climbs!

Slow and steady is preferable IMO, just as long as it's rising.


Sharesure,

I take your point, you are of course exactly right, but the market's taking a dip today, maybe the recent spurt of activity is retracing all round?

I have a feeling I may be topping up sooner rather than later.

Andy, I don't think anyone will lose money on GFM at this level taking a 3 month view; meanwhile if you have some cash doing nothing why not take a look at CHP ahead of their AGM which is at 11.00 on Wed. 5 Oct. If they don't put out a press release first thing tomorrow in my opinion an sp influencing release will come out mid morning. It generally has at their other meetings.

Sharesure,

I'll put in on my watchlist for tomorrow, thanks.

Resource sector all round was very weak today, hopefully it will bounce back tomorrow.

all very quiet today?....

Just shellshock!!!!!!!!!!!!!

it'll b ok.
cant expect 38 to 58 without a bit of a redress!

Especially on a day like today!

Would have been more surprised had the sp held up.

Amities / slt ,,,d'accord completement . lt was utterly inevitable following a percentile gain of 60% in a companies s/p in such a relativaly short period of 3 weeks that profit taking would be be rife After all this sudden surge in s/p is PI led. What with construction , development, and succesful implentation of a modern mine on budget ,and as planned immediately extracting the zinc has quite satisfied the market ; the prospect of impressive gold intersections has exited the market .... But something quite overlooked as yet is actually a commodity which ABSOLUTELY drives Chinas new flourishing highly profitable hi tec low density/ high margins electronics sector; and that commodity is silver ! which is used extensively in the production of every circuit board within every electronic device like your plasma Tv which have proven so popular in the USA or such like gizmos. ..Chinas demand for silver has increased 20% year on year since 2000 in its endeavours to satisfy the appetite of its burgeoning electronics industry. lt is the apple of Pekings eye: and accordingly filled thier fiscal coffers. .......And what is more this mine has very high concentrations of silver which was not equated into Griffins assayal at inception due to the severely depressed price of silver .lt was simply considered commercially unviable at that time. But how times have changed and Chinas electronics industry NEEDS silver to feed the insatiable appetite of this sector . Most weldings and soldering are done with this commodity . l am bullish on gold yet FAR more bullish on silver. And if you care to dredge through GFM s older drilling reports you will see this mine has massive concentrations of silver.... ...ln fact this is a mine with a plethora of both precious and base metals .....ln addition they are on extremely good terms with the Chinese at local, regional and national level. Recently Chinas powers to be issued an edict for to encourage and promote foreign mining companies: and it seems GFM were singled out for their excellent corporate governance . l may be in and out of GFM on the journey.But i am absolutely convinced this is a winner as i have always said in private correspondence to a few people on this very board since it was 2p at a time when the dot com companies were in freefall ...Along with JKX and FDI , this is my largest holding . , l soon anticipate a re-rating of the company as it has indeed moved from a junior exploration set-up to a producing income generating entity;.and with it a much improved s/p ......bonne chance a' tous des vous ....sois sages a'bientot ,,@+ J ,,Only problem could be lvanhoe , or AAL, or even BLT who would love to be set free with thier diggers on this apparently commodity rich landscape.lf this was to occur l believe the board would demand a very hefty premium. And utter refusal if GFM institutional backers made real thier statement of having high hopes for GFM.

TFC...so you have filled your short after being negative last week and now you have bought back hence your about turn of sentiment! You also go by the name Simon Cawkwell do you???
Di