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.

You really have the gift of cheering oneself up....I feel much better thanks !.

Am waiting for scotinvester to say " we are all doomed, doomed I tell you, doomed "

Sounds like Frasier in Dad's army....permission to speak sir !.

its fraser......not that baldy yankee poof called frasier. frasier is shite prog too and unfunny.

dads army on other hand is classic british humour.
from fraser with his canny comments to dear ol godfrey....and stupid pike.....and goings on with wilson, mannering etc......fantastic

oh ok

we're doomed i ell you.....doomed

whats happened to this share ...?

dunno. It's been hit by commodity prices. strange one. citadel sold their stake, at a loss i think, to griffin, who essentially bought back their own shares. This should have enhanced the value, since a shrinking of the outstanding shares leads to higher eps. it's a small share. dunno how much institutional backing it has, so perhaps a lot of private investors have got scared which has dropped the price.

sorry didn't see the other thread on this. forgot what i said. dearleader's comment was much better.

buy backs in practise do not increase value for shareholders, or share price, but make the coy more attractive to a predator. already with $90m cash and a first class business Directors should feel their jobs at risk ... please gentlemen increase dividends and build the price to reward faithful share holders

Some would call the latest RNS a profit warning....but the only surprise is the delay in increased production...so, in the next six months there will be a massive increase in zinc production....that is good, we must hope that zinc does not fall any further and there is the reduction in profit sharing....going from 100% to 60%....conclusion : increase in sp up to 50p by Christmas...hope so !.

GFM has been showing a constant weakness over the past 12 months. With the economy getting more gloomy, I can't see it going to 50p by Christmas. Furthermore, zinc price has been collapsing with increasing smelter costs.

Sell down to 20p.

18p now...with zinc down to $1135...continue sell to 10p

Very well run this little mining company, they don't put a foot wrong, just unlucky with the price of zinc, in good times this would be a gem of a share !.

What's wrong with it now? be patient

THEY HAVE SUSPENDED OPERATIONS FROM MEMORY

Mothballed till march 2009.

LISTEN: Griffin Mining (GFM) - Half yearly report

INTERVIEW

On the move up again after a good RNS - up 5% today with very low volume

GFM break up again shorter time frame.