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.

Could it be CHP, Sharesure.

Long term hold IMHO. No debt, good management, huge potential and making money. Zinc price is rocketing. it's just waiting to take off!

Aldwickk, Right in one!! The next few weeks for CHP just looks very good.
Still intend to come back to GFM as I have no doubts about the company's potential; I realise that in being out of the stock I may miss a bid or some further gold news, so good luck to those remaining for that; I hope to be back in in time for it!

LONDON, March 21 (Reuters) - Zinc closed at a new record high on Tuesday in Europe on further speculative buying, but copper failed to follow and lost momentum to end flat.

Zinc futures finished open outcry trade on the London Metal Exchange (LME) at a fresh peak of $2,510 a tonne, up 1.6 percent.

Prices have risen over 30 percent since the end of last year as zinc's firm fundamentals have attracted speculative buying.

Zinc rose after Australia's Kagara Zinc Ltd. (KZL.AX: Quote, Profile, Research) said it would have to stockpile ore from its mines in cyclone-damaged Queensland state for up to a week until power was restored. [ID:nSYD242954]

"Zinc is a very strong metal right now," a trader said.

Roy Carson of Triland Metals said in his daily report that the metal's performance suggested more gains ahead.

Analysts also noted that zinc was trading at a premium to aluminium for the first time in some 13 years.

Demand for zinc-coated steel for construction, vehicles and household use from economies like China, India and Brazil, as well as from traditional markets, has left zinc smelters struggling to produce enough metal to meet demand.

"We believe that this premium is likely to widen further, as zinc's stronger fundamentals argue for it to out-perform," Robin Bhar, base metals analyst at UBS Investment Bank said in a research note.

Still holding and still see the sp as undervalued, just got back from holiday hence no posts from myself. I saw in an earlier post a target of 78p was it. I've not set a target yet as production isn't even a year in and could potentialy change. Also we've no idea on gold reserves or how Griffin will mine. Anyone know if Griffin has a lisence to even mine gold yet?

Even if they do have a licence, the gold is at deeper levels than currently being mined. Interesting times ahead, but given the recent news I wouldn't expect the results in May to disappoint. Fingers crossed!

Loads of buying going on...lots of 25k's and 50ks yesterday and more today...something is happening I think...good increase in sp...Looking good.
:-)
Di

Reached the 70p barrier we have been hoping for. More to come if "profit takers" hold their nerve.

Reached the 70p barrier we have been hoping for. More to come if "profit takers" hold their nerve.

blimey! I thought you'd all gone!
a good week so far 78 st target imho dyor etc etc

Sharesure,
Will you be coming back to GFM or staying with CHP or do you think both have the same prospects,I dont know too much about CHP but i do know GFM have much further to run.
Value your opinion.

Have you noticed that Griffin continues to rise on a daily basis without any chat or more partucularly hype on BBs - there may well be a lesson to be learned

Well Oakapples...I think it's just a case of sitting tight and time will do the rest :-)
Di

Griffin, When I recently reluctantly sold the remainder of my GFM stock I said to my broker watch this stock continue on up as I am sure it will attract a bid as well sometime. I had to sell because I wanted more stock in Chaco Resources (CHP).

Re CHP, I do think that that has a very high chance of being 80p-100p by the end of 2006 cf with current sp of 15p. There is much news yet to come out on it as it explores its various South American interests in Colombia and Paraguay, but also is highly likely soon to announce a tie-up with a major oil company which will provide financial muscle, drilling rigs and extra credibility. If it does what I think it will do maybe I can get back into GFM before it goes out of reach.

for some reason, I cant paste a chart but
have you seen the current gold price breakout?

And were into the 80's now whooooopppppiiiiieeeee.....

Well I have to say GFM is the current star of my portfolio up 31% on my intial investment in the past week alone and alot more to go I think :-)))))))))
Di

I bet Sharesure is kicking himself for selling to buy CHP.

Aldwickk I sold some NOP and bought some CHP...not gonna sell any GFM yet...I still think there is alot of upside to come. Even when I do sell some GFM I will keep some.... My only worry is that 60% of my portfolio is now GFM due to massive profits and 25% is KMR for the same reason.
Di

Dynamite,

Its a worry when they go up and a worry when they fall, LOL

Am overweight in GFM, EEL & CEY.