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.

I must say they are taking an awful long time about it

sorry duplicate

If you mean 4pm ....don't forget they are talking about Western Canadian time !

No suprise with the results...(though I thought that the dividend could have been increased ), but they should get a million pounds or so from the Yukon Zinc takeover debacle,....now what are they going to do with their huge cash pile ?, even with the mine extension development taking a certain amount , they will be left with a massive amount in the bank !

does this ever go up?

even on great news with share buyback, nothing happens.....this should be nearer a pound

I agree scotinvestor....one of the best aim stocks....very successful company....disappointing sp....just won't go up....perhaps we need the price of zinc to start moving up rapidly to get things moving again !.

does anyone know why the shareprice drifts lower but does not rebound.is this being shorted..or demand for zinc falling off.

zinc has been lower.....however it went up 6.6% yesterday but sp still stagnant.

A magnificent coy, I have been in and out over the last 3? years sometime making a few bob and some time loosing. Considering the quality of gfm, earnings etc I should have made money and it been a staple item in my portfolio, the MD has done an outstanding job, and also never fails to say how important share holders are but despite that the sp has been dismal.

Now Sir I need an income from shares I risk my money on, just as no doubt your fellow directors and employees expect to benefit by increased earnings from successful work. Surely the best way to support a share price is by increasing dividends, there is absolutly no evidence that share buybacks do that, however they do make a coy much more attractive to a preditor. How about it Sir? before some one notices that there is $90mil in cash on the balance sheet that could be picked up by takeover of a first class coy very cheaply -

I realy, realy would like to be a long term investor.

tipton

Dont forget next month GFM lose control over part of their cashflow to minority shareholders also there is the question of chinese taxation as the two year tax break has ended.

thanks for the note but perhaps all the more reason for a decent div?

The GFM sp is very much susceptible to the price of zinc, regardless of production and possible increases....it's about time there was an upward movement.

Total freefall here.....never thought I'd see GFM in the forties again....soon there will be more money in the bank than the company is worth....!.

RF some upward movement at last..blackrock increaced its stake to 13% lets hope that we have seen the bottom ...got to be cheep at these levels.

I hope so....this was my favourite stock not so long ago...(must not fall in love with shares I know)...perhaps a climb now...after all they are mining a little bit of gold as well as other precious metals and that is rising !.

market cant hear u.......all doom and gloom....everything going down.....good news and nothing happens....bad news and sp down 75%

another 15% down

Well...as this has been dropping over several months ...forced into selling 2/3 of my original holding...now we are seeing silly prices for loads of good ones...what a market...really dreadful....only IEC and RIFT bucking the trend for me....we must pray we are not going to see 1929 here...oh ! please no !.

after that came hitler, stalin, franco and mussolini

iec was just good fortune cos of proposed bid so just rift really holding up