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.

How much exta revenue are we talking in first full year recovery. Say 7 g/t x 275000 tons pa divided by 28 = 68,750 oz x $500 per oz = $34,375,000 pa. Have I got it wrong or are we talking loads of money here?

p-snow,

Have they declared a JORC standard resource?

for an 8% rise and 4 million shares traded, theres a strange stillness about the market makers... no price movement since 9.16
anyone have any idea on this?

Amities / En brevite mes amies / Great news !!! Yes . LOTS of money !! . .................................................................................................................................................................................... The statement accredited in the RNS to the Chairman,Mladen Ninkov, that "these extraordinary results speak for themselves " say it all in a nutshell . There are a plethora of pure gold prospecting companies valued at 10x GFMs s/p who would be green with envy at a strike of such attractive gold deposits. And considering gold was the second string to the bow of GFM i see 80p very soon. Very soon . For from small acorns do great oaks grow ! ..............And yet look at all the sellers letting their shares be literally soaked up by MMs ......Methinks a big institution is making a principal position . How say you all ?? Bonne chance ! @+ J

Juste look at the number of short term traders and t+10 , 15, 20 closing their positions between 65 and 66 yet mms merely soaking them up !! Usually a plethora of "sells" like that would shave a few points of GFMS very volatile s/p .. But as yet it isnt ! . A Principal position is in my opinion being sought by a big player @+ J .,,,,accompanied by the smell of burnt shorters ...

indeed a rise FC!

I dont know Andy.

My only concern is how the Chinese view other resources. Their attitude may be that Griffin have a remit to mine zinc and are being paid hansomely to do it. Any thing over & above zinc the Chinese may view to be theirs. they may be prepared to pay Griffin over the odds to get it out of the ground and process it but may not want to pay anything like its true market value or see the revenue spirited out of the country into western pockets. The Chinese are shrewd businessmen and I think if I were them Id already have a strategy for getting my hands on a decent slice of the gold cake.

Some of those points regarding gold have already been covered , nothing to worry about.

Aren't they due to release (probably fairly stunning) full-year results any day now??

p-smow,

Well Griffin DO NOTY have la licence to mine gold, apart from up to 3% as a by product of the ZN production.

However, the Chinese partner SHOULD be able to aquire the licence in the opinion of GFM.

I was just wondering where you arrived at the production figures without a JORC standard report on the deposit.

To mine gold, GFM would need to enhance the current mine.

Amities ...Well mms sat all day long buying a tad shy of 2.5 million shares inbetween 65 and 66p without materially budging either the bid or offer . So forearmed with the knowledge which has proved in the past to be one of the most volatile shares on AIM ; For example ; i have seen a single 100,000 sale shave 2 points of s/p ......and yet here we sit with sells amounting to over 2.5 million and buys a meagre 40,000..................................................................................................................SO ? That leaves three possible rational sceanrios ....( i ) A principal position is being ammassed on the cheap for a big player . ( Likely }....( 11 ) News of a "bid" for the entire issued capital of the company has been leaked . { doubtful but not fanciful } -lvanhoe and AAL and RIO all looked the place over . }......Or finally knowlege has become known to mms which has led them to retain stock in anticipation of some very good news on the horizon. Lets face it; they are not paying 65.5 for a few million shares to only later sell at a discount . lt doesnt quite work like that ..lol The notion is absurd ....They WANTED sellers today !! and the sellers obliged .... With a ratio of 9 sells to every single buy ( buyers accredited for a mere 2% of the market in GFM . Sellers at 98% ...Yet s/p slightly improved .....Doesnt that make you think as mms could have taken GFM to less than 50p on that plethora of sells ..... ? ...........Good news is on the way !!! @+ J

morning miners!

Metals prices hinge on McArthur River



Tuesday, 14/03/2006

The future of a Northern Territory mine is likely to have an impact on global metals prices.

Xstrata is waiting for a Government decision over its proposal to expand zinc and lead mining at McArthur River.

Both metals are already in very short supply, and the demand for zinc is growing by more than 4 per cent annually.

Glyn Lawcock of investment bank UBS, says high world prices are likely to be sustained for several years if the mine closes.

"Zinc would be the one that would suffer the most (if Xstrata does not expand)," he said.

"We are looking at a deficit this year of 400,000 tonnes (of zinc worldwide) and a market moving back into balance in 2007.

"The loss of the McArthur River mine would increase our deficit this year by perhaps as much as 100,000 tonnes, but would force the market into a deficit until 2007 which would further support prices in our view.

"It would at least support a higher price for zinc in the coming years."

breakout!
I have a personal st target of 78p dyor

No posts here for nearly a week, quite amazing!

Has everyone sold?

still in...why sell??

still in...why sell??

Still in - long term hold on this one : )

I reluctantly sold to buy more in something else which I reckon will move more quickly.