Griffin Mining Share Discussion Threads

[up just a little bit] 08/1/2018 08:29

Reading sageman's post on ii /I. A very good basic summary of where we were in 2007 and an inkling of griffins potential....

[owenga] 08/1/2018 08:26

I'm hoping we will get a trading update in the next week or so, which should help to confirm out H2 revenue expectations. I'll then re-do my detailed annual forecast. At the moment I am estimating about usd55m PBT for the year.

[rose_by_another_name] 08/1/2018 08:21

Only Monday and I'm interested already.

[up just a little bit] 07/1/2018 22:32

The week ahead will be very interesting

[phillis] 07/1/2018 21:13

Yes, good work Polaris
A little late to the party but never mind

PS 20 c EPS for second half

[polaris] 07/1/2018 20:39

If they are willing to give me a retainer then i'll be happy to do the job for them. However, i will not give up my day job as science is my calling. It pays the bills and gives me the flexibility to use my analytical skills for other purposes. ;-)

A lot of broker targets are highly biased, just a route to get the necessary churn to make profits. There is nothing more satisfying than getting to grips with all the niggly details in financial statements over a number of years and then making a killing by seeing something that no-one else connects the dots for.

[acuere] 07/1/2018 20:23

Good work Polaris. You've certainly put in a lot more effort than the nominated broker/adviser Panmure Gordon, who have made no comment since 3rd Aug. I'd have thought they would be embarrassed to have a Buy rec and target price of 93p still on record.

[polaris] 07/1/2018 20:20

TBH i don't give a toss about about the past. I look at balance sheets and current output/trading to make investment decisions. There are people on here who are just broken records. Post it once and then let it be. AIM is filled with dodgy dealings and opaque financial agreements. I am pretty sure that zone II license will not be awarded until someone gets their 'fair share' of the upside, otherwise known as bribery. It is rife, especially in the mining sector. Most small cap miners are the proverbial liars standing next to a big hole, taking home a fat wage while the shareholders get shafted. You get what you pay for. All early developments are paid with share issues that dilute holders. It is part of the reason i stick clear of early stage projects.

Even when you get to production there will still be hiccups. Here, that will be the directors awarding themselves options with some stupidly low conversion price. However, that does not detract from the day to day trading, the prospects for the company and the LoM. It does affect eps and is something i make sure i am aware of. No point getting too excited if there are 100M+ options waiting to vest that will massively dilute eps! At this point in the cycle, all these look good for now in GFM, due to buoyant metals prices.

As an investor, make hay while the sun shines and then move on. I have my trading targets for GFM with and without the zone II approval. I'll just move on when those targets are hit and leave chasing the rainbow to others. Going on and on about things in the past that you cannot hope to influence is the epitome of standing on the beach commanding the tide not to come in.

[phillis] 07/1/2018 19:06

Nothing wrong with share options - for executives!

In the last issue Usdan got more than the FD

Incroyable!

[lucicavi] 07/1/2018 18:49

In the early days virtually all finance was raised by the issue of shares. Shares were purchased by a number of different entities - included among these was Trellus Management and this Hedge Fund Management team bought a substantial number of Griffin shares - sold at market prices Griffin were able to successfully complete their feasibility study, develop the mine and remain debt free with a reasonably small dilution of shareholder value. Adam Usdan was the main contact between GFM and Trellus , and he has been the President of Trellus since 2014. It is doubtful that GFM would be in the healthy state it is now (or indeed exist at all) but for the financial help from Trellus.


Looks like free shares after the event

Should have agreed back then not now

Institutional investors wont take kindly to this dilution






Mr. Adam Usdan, through both direct and indirect interests, has a beneficial interest in 30,659,556 shares in Griffin, representing 17.1% of the Company's issued share capital.



You cannot favour one investor over others like this
And free shares to a director stinks

[roguetreader] 07/1/2018 18:11

Cheers Paul,thanks for sharing, will be interesting to see the final year
numbers once published

[polaris] 07/1/2018 15:10

I take it back - put the kettle on and went through the H1 2017 figures again using my FY revenues, as they are likely to be close to the mark. The eps comes out at 18p using this cf 15p for my calcs above!!

H1
Rev $52.3M
CoS $20.82M
Gross profit $31.5M
Op Exp $8.1M
other costs $1.5M
Profit before tax $22M
Inc Tax $6.21M (28%)
Profit after tax $15.84M
EPS 8.85c (179m shares)

That would become for FY
Rev $122M
CoS $42M
Gross profit $80M
Op Exp $16.5M
other costs $3.5M
Profit before tax $60M
Inc Tax $16.8M (28%)
Profit after tax $43.2M
EPS 24.13c (179m shares)
so about 18p at current exchange rates!

and for 2018:
Rev $137.3M
CoS $42M
Gross profit $95.3M
Op Exp $16.5M
other costs $3.8M
Profit before tax $75M
Inc Tax $21M (28%)
Profit after tax $54M
EPS 30.2c (179m shares)
so about 22.3p at current exchange rates

That would change my estimates for price a lot, suggesting a range of 180-220p on a conservative 8-10 forward p/e.

This will be one to delve into when the FY figures are announced.

It also suggests cash flows for H2 above $40M, which explains why the debt has been repaid early.

The revenues can also be higher if i have the smelter charges too high. Again, i can only really look into this by comparing the H1 and FY figures to average metals prices.

All these estimates are highly linked to the metals prices and so open to a high degree of variability.

I am also biased as i hold GFM so please take all the above with the usual pinch of salt! ;-)

regards,

Paul

[polaris] 07/1/2018 14:35

Bored on a Sunday afternoon so i have put together my forecast for the 2017FY figures based on a couple of assumptions.

Zn 40kT
Pb 1.4kT
Ag 330kOz
Au 18.5kOz

I have used the 200dma metals prices to work out the metal value in concentrate for the primary Zn and the secondary metals listed in the H1 2017 figures. That gives a ballpark figure of 80% of metal in concentrate value for the primary Zn and 90% for the secondary metals.

Based on the totals above for FY production gives the following, assuming no cost savings in H2 and so operating profit, profit before and after tax and EPS are directly linked to the H1 2017 revenues of $52M:

FY revenues post smelter charges $122M
FY EPS 20.75c or about 15p

As i have the metals prices to hand through my IG account i also quickly ran the figures through for projected 2018 based on today's metal prices and no uptick in production stats. That comes in at:

projected FY2018 revenues post smelter charges $137.3M
projected FY2018 EPS 23.4c or about 17p

I also took a stab at the possible upside if the zone II license is approved. The total throughput for FY2017 is about 920kT of ore. The nameplate with the new mill is 1.5MT, a possible uplift of 60% or so. Again, assuming no cost savings at all from bulk mining (i am sure there will be strip and preparation costs to take into account so it is rather basic) then the possible upside is:

projected revenues post smelter charges at full capacity with zone II $220M
projected EPS at full capacity with zone II 33.2c or about 24.5p

The figures based on the current metals prices are at:

Zn $3350
Pb $2550
Ag $17.2
Au $1320

The 200dma at June 30th 2017 are:

Zn $2600
Pb $2200
Ag $17.20
Au $1225

The 200dma at 30th December are:

Zn $2900
Pb $2330
Ag $16.80
Au $1270

As previously stated, all revenues were calculated using a smelter charge of 20% for Zn and 10% for other metals. These were calculated using the production figures for H1 2017 and the 200dma metal prices at 30 June 2017. The smelter charges may be a fixed fee, in which case the higher metals prices will work their way straight to the bottom line and increase my estimates. The smelter charge for H1 2017 comes in around $530 per T Zn.

A lot of conjecture in my calculations but i think they provide a reasonable base case for forward valuations. I am not one for very large p/e for a pure mining play, with 8-10 on projected forward earnings a reasonable starting point. This suggests a base target range of 136-170p based on projected 2018 earnings. I am sure there are others who will suggest something more in the range 12-15 on p/e. Any movement on zone II and we are looking at another 60% on top of these estimates.

Happy for anyone to poke holes and ask questions on my calculations. Of course, everything is highly sensitive to the metals price! That explains the poor figures for GFM in 2016, when metals prices were very depressed on current prices.

regards,

Paul

ps costs for the mill are also a %age of revenues in my calcs. This is unlikely to be the case as the costs to run the mill are likely to be similar to H1.

[busterdog2] 07/1/2018 11:57

It’s called the Real World, get used to it.

[lucicavi] 07/1/2018 11:38

In the early days virtually all finance was raised by the issue of shares. Shares were purchased by a number of different entities - included among these was Trellus Management and this Hedge Fund Management team bought a substantial number of Griffin shares - sold at market prices Griffin were able to successfully complete their feasibility study, develop the mine and remain debt free with a reasonably small dilution of shareholder value. Adam Usdan was the main contact between GFM and Trellus , and he has been the President of Trellus since 2014. It is doubtful that GFM would be in the healthy state it is now (or indeed exist at all) but for the financial help from Trellus.


Looks like free shares after the event

Should have agreed back then not now

Institutional investors wont take kindly to this dilution






Mr. Adam Usdan, through both direct and indirect interests, has a beneficial interest in 30,659,556 shares in Griffin, representing 17.1% of the Company's issued share capital.



You cannot favour one investor over others like this
And free shares to a director stinks

[lucicavi] 07/1/2018 11:36

what a weird one this is not tech this is mining
also look like it leaked

[up just a little bit] 06/1/2018 18:28

Dear Mr Belter.
Do your research it's all there.

[gersemi] 06/1/2018 11:55

Tipped as one of Techinvest's NAPs of 2018

[phillis] 06/1/2018 11:16

I am fully aware of GFMs history
This does not justify the award of huge options to a non exec

[bigbelter] 06/1/2018 11:07

With regards to Mr Usdan, why don't you read a bit about Griffin in its infancy.

In the early days virtually all finance was raised by the issue of shares. Shares were purchased by a number of different entities - included among these was Trellus Management and this Hedge Fund Management team bought a substantial number of Griffin shares - sold at market prices Griffin were able to successfully complete their feasibility study, develop the mine and remain debt free with a reasonably small dilution of shareholder value. Adam Usdan was the main contact between GFM and Trellus , and he has been the President of Trellus since 2014. It is doubtful that GFM would be in the healthy state it is now (or indeed exist at all) but for the financial help from Trellus.

So Mr Usdan - 'a large professional investor' - but also someone who invested big time in a small start-up company in China - a location where most, if not all, other similar ventures had failed miserably.

[up just a little bit] 06/1/2018 10:38

Ukgeorge. I totally agree we are in a good if not brilliant position now.

[up just a little bit] 06/1/2018 10:24

How do you feel about the Australian debacle.

[phillis] 06/1/2018 10:11

How do you feel about the large options awarded to Usdan, a large professional investor who got to be a non-Exec

[gary1966] 06/1/2018 07:28

Up just a little bit,

One of the attractions for me of this company was that the directors have regularly bought shares in the open market and haven’t regularly been awarded options. When they have been awarded options they have come at a price, not freebies like so many companies. Of the outstanding 20m options a third of those will remain unvested until they get the zone II licence issued. Strike price on these is 30p which wasn’t a give away when they were issued in Feb 2015. All the directors have some skin in the game and I am sure they will be as keen to receive dividends and a return as you and I. If the price stays at these levels then there would be a strong argument to use the cash to launch another share buy back program.

ATB