Griffin Mining

Thursday, Aug 03 2017 by
12

In order to diversify myself i been looking into the mining sector.
GFM:  The group posted an operating profit of $23.5m against a loss of $1.8m a year ago and a pre-tax profit of $22.1m (2016: loss $4.1m).

Trading update today, the Chairman Mladen Ninkov commented, "I am sure shareholders, in conjunction with management, derive enormous satisfaction from the outstanding results for the first half of the 2017 financial year.

"The result was due to a superb operational effort by all concerned with the Caijiaying mine which led to increased throughput and higher zinc grades in conjunction with the long awaited increase in the zinc price and lower smelter charges.

"Needless to say, we fully expect, all things being equal, an equally as impressive second half of the year.

"Most importantly, the priority of the Company remains the granting of the new mining licence over zone II at the Caijiaying mine which will only multiply the results achieved to date.


Further upside mainly depends on the commodity price environment continues into the second half of the year for it to stay above current market forecasts.


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Griffin Mining Limited is a mining and investment company. The Company's business segment is Caijiaying zinc gold mine in the People's Republic of China. The Company is engaged in exploring, expanding and developing the Caijiaying Mine. The Company, through its subsidiary, Hebei Hua Ao Mining Industry Company Limited (Hebei Hua Ao), holds approximately 9.9 square kilometers of mining and exploration licenses and the mine and processing facilities at Caijiaying in the People's Republic of China (the Caijiaying Mine). The Company, through Hebei Sino Anglo Mining Development Company Limited (Hebei Anglo), holds approximately 27.5 square kilometers of exploration licenses immediately surrounding the Hebei Hua Ao Licence Area. The Caijiaying Mine is an operating zinc, gold, silver and lead mine, together with a processing plant, camp and supporting facilities, located north-west of Beijing in Hebei Province. more »

LSE Price
98.5p
Change
-3.9%
Mkt Cap (£m)
176.5
P/E (fwd)
6.4
Yield (fwd)
2.8



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25 Posts on this Thread show/hide all

slopsjon 12th Dec '17 6 of 25

Top stock on the UK Stockrank

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vik2001 12th Dec '17 7 of 25

this has done well for me. I always had a target of 120p

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JPshares 12th Dec '17 8 of 25

In reply to post #237818

How can you tell they hedged your position?

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slopsjon 12th Dec '17 9 of 25
2

When I opened the spreadbet a buy appeared on the Level 2 trade list with the same amount shares for the improved price that IG gave me.

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vik2001 18th Dec '17 10 of 25
1

Cantor Fitzgerald reaffirms its buy investment rating on Griffin Mining (LON:GFM) and raised its price target to 166p (from 137p).

Personally I can see this going a lot higher as they are debt free now & the licence could double production, and im also hoping to see a divendend declared. - so ive set my personal price target around 180. to me this is the most exciting mining share out there in terms of its potential.

Obviously I hold, so DYOR.

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shine66 18th Dec '17 11 of 25

The fact they have paid off a mountain of debt so quickly got my attention last week. Share price seems to move with zinc price which is at a ten year high and and could be a roller-coaster if something goes wrong. CEO seems genuine IMHO which reassured me sufficiently. In 2018 the huge cash-flow (now without the drag of interest charges) should translate to a decent dividend, and if they ever get that second licence you refer to there's plenty of further upside.

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vik2001 18th Dec '17 12 of 25

I believe zinc will remain elevated into 2018 due to supply / demand being high. also the zinc market is held preety tightly which gives me confidence.

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brileen 18th Dec '17 13 of 25
1

Hi vik2001
Thanks for your original note of August. It caused me to look further at this share and eventually take a position. At the time I held no mining stocks and now own only this one. I have no idea when to sell but will hold for the time being. Have been looking for another so far without success.
BB

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vik2001 28th Dec '17 14 of 25

GFM has broken its resistance level of 116p, indicating further momentum. I have further topped up on this today.
they are operating still on a low P/E, and no debt. Broker ratings have also increased this month.

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iwright7 28th Dec '17 15 of 25

I am impressed with the fundamentals and newsflow of £GFN and have taken an opening position today.

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vik2001 28th Dec '17 16 of 25

In reply to post #290088

must have been that sexy looking chart that tempted you ;)

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iwright7 28th Dec '17 17 of 25

In reply to post #290133

Yep - I often buy at a 52Wk High, with shares and valuation multiples I think have further to go.

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Cisk 28th Dec '17 18 of 25
3

You need to be mindful if ‘investing’ in this company, I have followed them for over 20 years, have bought and sold many times in the past, met the CEO several times and attended AGMs etc.

I haven’t held shares for several years, because a) they are registered in Bermuda, b) (from memory) they no longer hold AGMs in the UK, c) there are significant, large payments to connected company of the CEO (or there used to be), you can speculate what these payments are for. But being a mining company operating in China, and understanding how the system works there, can lead you to your own conclusions.

Apologies if my knowledge is out of date, I haven’t looked at them lately, however just be aware of the risks. A great recent chart might make a good speculation and blind the unwary to the downsides, but it’s always good to consider all sides if you want to hold for any period of time. I prefer to be able to sleep at night - no doubt I’ll miss out on some spectacular gains though!

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vik2001 28th Dec '17 19 of 25

In reply to post #290218

hi
did you encounter any issues with the way the company was run during your time of if investing on and off with them?

their broker also is Cantor Fitzgerald which gives me some what assurance of the company has been researched well before acting as designated broker. But I do understand China and AIM can be risks, but this company has been trading for a long time, and ive not come across anything to suggest foul play in any way over the years. So at the moment nothing gives me to much cause for concern unless otherwise proven.

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gus 1065 28th Dec '17 20 of 25
2

In reply to post #290218

Hi Cisk.

Always good to see the counter view. A quick trot through the company RNS and latest (2016) Annual Report confirms all of your red flags still apply. The company was registered originally in Bermuda (although has an office in London) the most recent AGM was held there in a June 2017 and note 3 on page 48 of the Annual Report discloses a payment of $1.8m to Keynes Capital for consultancy work. KC is an advisory company of which the Chairman Mladen Ninkov is a principal. So far, so fishy.

This said, the fact this is all readily disclosed and easily discoverable and is signed off by a Grant Thornton as auditors makes me reasonably sanguine. Ninkov himself is Australian and has a decent c.v. In law (US firm Skadden Arps) and relevant industry background and the rest of the remuneration disclosure for the Directors seems of a reasonable level. (I must confess some initial concern that the name suggested he was was Russian).

I think you’re right to be wary of this heady mix of AIM, mining, China and inter company fees (anyone familiar with the fun going on at Asa Resource (LON:ASA) ?) but in this particular case I’m prepared to take a small position based on the strong metrics ...... and watch closely. Trust but verify and all that.

Gus.

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vik2001 28th Dec '17 21 of 25

have a watch of this, chairman touches on the risky market in China. its a 3 min video.
states they been operating 10 years, and had 55 junior companies follow them in, with only 3 remaining. doesn't give much away. but the fact they have been there for 10 years gives me confidence. he does touch on how they managed to be there 10 years and that once they are in cash they like to pay a divended (they are now in cash being debt free, so am hoping for that divended to be declared sometime next year)

please note video is a few years old.

http://www.iii.co.uk/brr-media/211157/griffin-mining-highlights-101st-minesite-forum

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Edward John Canham 29th Dec '17 22 of 25
2

I've been pondering this share for a few months now - like what I see but certain things hold me back and the Xmas break allowed me to do some more research. My problems are:-

1) Company is incorporated in Bermuda and there is a big related party consultancy agreement connected to an executive director as referred to above. To me these seem to be unnecessary and deliberately opaque.

2) There are 25M share options out there at 30-40p which seems on the high side.

3) There is the Chinese/AIM thing - virtually certain this is not the case here, but can't get it out of the back of my head. I was reminded of it tonight as Orangetree's Aquatic Foods post from 2016 came up due to the final sad conclusion there. It's interesting to note that Orangetree's third red flag "Deposit rate + Finance income not matching" seems to catch Griffin - cash and cash equivalents at end 2016 $13.2M, at start $24M, average $18.6M, finance income $0.178M gives deposit rate of <1%. I guess I'd like an explanation there.

4) Hold a medium stake in Central Asia Metals - Central Asia Metals (LON:CAML) - which I held for the high yield on its copper operation. A couple of months back they bought a Macedonian zinc mine in what they called a "transformational deal" - they didn't ask my permission but when it happens you have to go with the flow if you respect the management. Looking at the numbers, Griffin and the mine CAM bought are virtually the same size in turnover and operating profit.
The difference is that CAM has a long history of returning cash to investors, and although I expect a slight dip in dividends following the purchase in 2017, I'm confident of 5% dividends going forward. Looking at Griffin the forecasts are for a 1% yield in 2018 which seems derisory and I never feel a resource company is real until they send me some cash.

So I guess I remain cautious on this one and will stay on the sidelines for now. For me I'd only consider when it starts paying a meaningful dividend.

Phil

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Zoiberg 5th Jul 23 of 25

I did well in this share because it lagged the terrific rise in the price of zinc. I think it is becoming an interesting play again as the price of zinc starts to slide back. I am not clear of the exact causes for this but increased production on the back of the zinc price rise could be one factor and Trumpian Trade Wars another (zinc is used to coat steel against corrosion - google wiki and galvanising).

Would be glad to hear from anyone with deeper insights than mine.

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mmarkkj777 5th Jul 24 of 25

Interested to read some of the above insight into this companies background. They are on my shortlist to add to my portfolio (but only since May). I think I will buy but with a much smaller position than originally intended and see how it goes.

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pgs501 11th Jul 25 of 25
3

Rather an exciting RNS put out this morning that Griffin Mining (LON:GFM) have got a license contract signed with the Ministry of Natural Resource to mine Zone II (well they are onto the final stage that they are suggesting is largely a rubber stamp exercise).

https://www.stockopedia.com/share-prices/griffin-mining-LON:GFM/news/griffin-mining-ld-licence-contract-with-ministry-of-natural-resource-urn:newsml:reuters.com:20180711:nRSK2874Ua/

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