Griffin Mining Share Discussion Threads

[phillis] 13/4/2018 16:11

Malcolm

?
The Cinese investor gets a regular dividend/ return

[malcolmmm] 13/4/2018 11:03

Zinc up a little today. Some big buys coming in this morning. I did email them, will take a look later to see if they have replied as yet.

[polaris] 12/4/2018 20:07

I sold my trading holding today as i will go on holiday at the weekend and do not like to leave positions open, due to some 'previous'. No-one wants to get a margin call while on holiday when everything was rosy when you left, believe me!! I've had that twice in the dim and distant past. I have learnt that lesson!

edit
Also doesn't help that Zn broke the 200dma to the downside conclusively today (with high contract volume) on the rumours of the Chinese to release some of the concentrate reserve. I redid the figures based on the 200dma from 1st Jan 2018 and came up with an eps of 17p, expensing the 11.2% minority as a payment on PAT. I'll re-evaluate in 2 weeks when i come back home.

[malcolmmm] 12/4/2018 15:35

Perhaps if they did declare a dividend they may have more chance of obataining the licence.

“The key to success in operating mines in China is to foster strengths, circumvent weakness and capitalize on favorable conditions and return investments to the investors,” said Liu, who serves as a director of Silvercorp Metals (TSX:SVM,NYSEAMERICAN:SVM), China’s largest primary silver producer. The TSX/NYSE American-listed Canadian miner has successfully operated in China for 12 years.

[malcolmmm] 12/4/2018 15:31

After reading this article I am wonder why they haven't obtained the long awaited licence.

In 1978, China set out to gain a stronger foothold in the global economy by reshaping its economic policies toward a more open investment climate. Over the four decades since their introduction, China’s “reform and opening-up” policies have transformed the nation into a global powerhouse.

Today, the country is the world’s second-largest economy, largest manufacturing nation and a major force in the global resource industry. With a population of 1.3 billion people and an extensive industrialization and infrastructure development program, China leads the world in the consumption of metals and minerals. Around 40 percent of resources mined around the world eventually end up in China.

The adoption of the initial Mineral Resources Law in 1986 and the opening of the market to private investors have both led to the modernization of China’s domestic mining industry over the last 30 years. China is now a major producer of more than 20 of the world’s most important resource commodities, including coal, gold and most rare earths. China’s mineral reserves are diverse and extensive, consisting of the largest portion of global reserves for molybdenum, titanium, tungsten and rare earths.

In November 2015, the government of China released its 13th five-year plan (2016-2020) for the economy, which underscores a transition from a manufacturing-based economy to a service-based economy. In its annual review on global trends in the mining industry, PwC reports that although this transition will decrease China’s demand for raw commodities, China will continue to be a major player in the global mining industry.

Mr. Yikang Liu, a former deputy general secretary of the China Mining Association and former vice-chairman of the Geological Society of China, has confirmed that sentiment. He told the Investing News Network that although China is completing the industrialization phase of its economic build out, mining will continue to play a critical role in the nation’s economy.

“The total consumption for minerals will still be very large. Many minerals, such as iron ore, will soon cross the highest consumption point. In China’s economy, the important status of mining will not change,” said Mr. Liu, who was the chief geologist for the former Ministry of Metallurgical Industry of China, where he made significant contributions to China’s most current (1997) Mineral Resources Law.


This INNspired Article is brought to you by:
Silvercorp Metals Inc. (TSX:SVM, NYSEAMERICAN:SVM) is one of the world’s lowest-cost, highest-margin primary silver producers. Silvercorp has succeeded in turning a profit even in the midst of a low silver price environment by taking strategic steps to raise the grade profile at its Ying District operation.Send me an Investor Kit
Foreign investment welcome in China’s mining sector

Since the launch of the “reform and opening-up” economic policies in 1978, China has attracted more than $1.7 trillion in foreign investment. The Asia Pacific Foundation of Canada says that “China has become one of the top three destinations for foreign investment since 2008, with a total inward foreign investment of US$126 [billion] in 2016.”

China first allowed foreign investment in resource exploration and mining in 1993. The revised Mineral Resources Law in 1997 further enabled foreign companies to establish joint ventures with Chinese companies that hold exploration licenses. One huge plus for foreign miners is China’s transparent, straightforward permitting process. Sino-foreign joint venture companies can secure exploration permits following the completion of necessary geological reports. Reserve calculations are completed by a certified Chinese mining engineering firm prior to the issuance of mining permits.

China ranks as the top mining jurisdiction for the whole of Asia, according to the Fraser Institute 2016 Mining Survey of the most attractive mining jurisdiction in the world. China’s taxation regime on mining projects compares favorably with some of the world’s top jurisdictions. Companies pay a 3-percent resource tax to the government as a royalty, along with a 25-percent income tax and a 17-percent value-added tax on sales of concentrates. Ranking 54th out of a total of 104 mining jurisdictions in the 2016 survey, China obviously has some room for improvement on the global stage, but its increasingly open economic reforms are paving the way forward.

China recognizes the importance of foreign investment to reaching its economic goals, and has been working over the past decade to redevelop its mining legislation to attract foreign companies.

China’s new open-door policy

China will “keep its door wide open and not close it” — President Xi Jinping

In 2017, China has made further policy moves toward opening the country to foreign investment in a number of sectors, including mining. Speaking at the World Economic Forum in Davos in January, Chinese President Xi Jinping said that the government will “expand market access for foreign investors … strengthen protection of property rights, and level the playing field to make China’s market more transparent and better regulated.” Over the next five years, he said, China expects to bring in $600 billion in foreign investment.

The same day that President Jinping gave his speech, Chinese Premier Li Keqiang signed a notice issued from China’s State Council entitled, “Circular Concerning Measures on Further Opening up and Actively Utilizing Foreign Investment.” The notice spells out the new measures China will take to further open up its economy, improve the business climate in the country and encourage foreign investment.

One of the measures outlined by the State Council, revising the Catalogue for the Guidance of Industries for Foreign Investment, was completed in July 2017. The newly updated document cut the number of restrictions on foreign investment from 93 to 62, further opening access to China’s services, manufacturing and mining sectors.

Specific changes for the mining sector include relaxing restrictions on Foreign Direct Investment in the development of non-conventional oil and gas resources; the exploration and mining of precious metals; lithium mining and mineral processing; and the smelting of rare metals, tungsten, molybdenum, tin and antimony.

More economic reform policies may be announced following the 19th Party Congress in Beijing in the fall of 2017. “We are going to send a strong signal: China will continue to actively attract foreign investment, and will take further steps to deepen the reform and unswervingly open China wider to the rest of the world,” said Premier Keqiang.

Political risk in China lower than investors may think

A mining jurisdiction’s political risk is a significant factor in determining its attractiveness as an investment destination, and investor confidence in China’s geopolitical climate has historically been apprehensive at best. However, since the country began opening the door to foreign investment in 1978, there have been no incidences of expropriation of foreign assets in China. And the nation’s business environment is expected to become more aligned with international practises as the economy develops further.

The first Chinese representative to attend the annual Prospectors & Developers Association of Canada (PDAC) conference, Mr. Liu gave a speech in 1995 on the investment opportunities in China’s mineral resources. “At that time, my Canadian colleagues did not understand China. After the speech, the question raised to me the most concerned the political risk of China,” said Liu. “Over the past 22 years since my speech at the PDAC, China has now become the second-largest economy in the world. The quality of Chinese people’s living standards has significantly improved. China’s social and political stability have been further strengthened throughout the country.”

One issue that gives pause for sustainability-minded investors is the perceived lack of consideration for environmental protections in China. However, Liu said that “environmental protection has become a basic state policy in China,” which has strengthened its commitment to building an “ecological civilization” by adhering to green development concepts and has “carried out the most stringent environmental remediation” in the country’s history. “The Chinese government will continue to promote green mine strategies in the mining industry,” he added.

Investors may still understandably exercise caution when it comes to considering China-based mining companies, but Liu countered that both favorable and unfavorable factors for investing in mining exist in countries across the globe, and China is no different.

“The key to success in operating mines in China is to foster strengths, circumvent weakness and capitalize on favorable conditions and return investments to the investors,” said Liu, who serves as a director of Silvercorp Metals (TSX:SVM,NYSEAMERICAN:SVM), China’s largest primary silver producer. The TSX/NYSE American-listed Canadian miner has successfully operated in China for 12 years.

“As long as a mining company receives high-quality mining rights, seriously abides by state laws and regulations, implements strict mine management, uses advanced mining technology and is committed to a high level of social responsibility to local communities, then this company will have stable production and profitability in China,” said Liu.

Silvercorp’s business model is focused on quickly advancing production. “This way you can share all the benefits with the local people, local community, local government, tax revenue,” said Silvercorp Chairman and CEO Rui Feng. “Then we can finance our own exploration efforts.”

According to Feng, Silvercorp built the Ying Mining District with only $5 million from Silvercorp shareholders. “Over the last 11 years, Silvercorp has received dividends of approximately US$280 million from the Ying Mining District profit,” he added. “Over that time we produced approximately 52.6 million ounces of silver and approximately 773 million pounds of lead–zinc, and we still have a mine life of 20 years.”

This INNspired article was originally published by the Investing News Network in 2017.

This INNspired article is sponsored by Silvercorp Metals (TSX:SVM,NYSEAMERICAN:SVM). This article was written according to INN editorial standards to educate investors.



zinc stock market report


Zinc Prices Have Hit a Decade High

[malcolmmm] 12/4/2018 15:13

Anyone read the Investors Chronicle today? can only read the free bit of it as I don't subscribe.
Zinc, gold, silver and lead. The metals that come out of Griffin Mining's (GFM) Caijiaying project are in demand, and so are the Aim-traded group’s shares. But after a staggering run over the last year, investors might conclude that the group could be about to hit a wall. That’s one possible conclusion from 2017’s record results, which provided no news on a long-sought licence that might allow the Chinese miner to double production

[malcolmmm] 12/4/2018 14:53

Gold is 1344 Zinc 3106.50 down 3.78% a big drop.

[malcolmmm] 12/4/2018 14:46

Most share prices drop after results are delivered so the market must have been surprised as they have held up well even with big sells going through . Most likely to rise than fall from here imo when buyers return

[rmjones] 12/4/2018 12:28

Well I have dumped 100,000 of my 400,000 this morning. May buy back depending on what happens over the next few days.

[ukgeorge] 12/4/2018 11:49

Zinc US$ 3,134/t vs US$3,250/t yesterday
• Zinc plunges as much as 3.5% amid speculations China’s State Reserve Bureau arranges release of stockpiles into the market, weakening fundamentals

[rose_by_another_name] 12/4/2018 10:22

That seems likely to me.

I sold part of my holding for tax purposes
before April 5th, not at the best price,
and was feeling a bit silly when it shot up,
but now may continue with my plan to buy
back in an ISA if it dips further.

However, I still remember buying at 95 on
the way down at the time of the last zinc
shortage. Griffin had hit 120 pence and all
the talk in here was about 2 pounds. It has
taken years for that 95 pence buy to get back
into the black.

[acuere] 12/4/2018 10:15

A lot of the 15% rise in the 3 days before results would be short term T traders looking to make a quick buck. Mms will be happy to keep share price low knowing they will be selling.
At 120-130 the share price was comfortable trading at a PE of 10 times Cantors eps forecast. With actual eps of 17.5p I see no reason why share price will not rerate to 170-180p once dust has settled and results fully digested.

[rose_by_another_name] 12/4/2018 09:46

People bought the potential and took their profit.
No reason to hold. In another year there may be
some more excitement, but probably no news in the
interim and no return on the outlay. As many have
advised me here, if you are looking for yield, sell
up and buy something else.

[philw1985] 12/4/2018 09:31

Anyone got a good reason for the share price since the results? I was fully expecting a nice jump when they came out, they looked on the face of it to be better than i even expected them to be and the share price has done nothing. Is the lack of potential growth (zone 2) and dividends holding it back or is there some other reason?

[ukgeorge] 12/4/2018 07:20

Thanks Paul. Very useful. Seems we are at fair value and the license 2 is a potential postive black swan event.

[phillis] 12/4/2018 01:10

Hmm I wonder if it is pre tax or post tax
Should be the latter of course
Tx anyway

[polaris] 11/4/2018 21:49

The payment this year was the best part of $6M, according to the results statement, but that must include other fees as it is not 11.2% of anything. If we take it as 11.2% of PAT then it is worth something like 2.5 c to eps.

It would be so much clearer if the Op ex were just the salaries etc (administrative costs) and then after calculation of PAT for the entity as a whole the 11.2% minority interest was expensed. That would be the normal way to report the minority interest as then the figures are clean. No idea why they report it this way as performing the calculation for that cost to Op ex seems overly complicated and opaque.

[phillis] 11/4/2018 19:15

On the road without a calculator
What would eps be if 11% cost to P&L is added back?

[polaris] 11/4/2018 17:51

Phillis,

I think i have included the effect of the minority by fixing the CoS as a %age of total revenues. That implies that as revenues and profits increase so does the administration (Op ex in my calcs), which includes the minority partner costs/fee/what ever they want to call it.

I agree that is it an unusual way for the company to deal with the minority interest and makes some of the costs rather opaque.

The figures read a bit like someone is using a personal spreadsheet and has forgotten to update some of the cell calculations!

regards,

Paul

[phillis] 11/4/2018 17:41

Polaris
You don't seem to have grasped that the 11% minority is not treated as a proper minority
It gets its share of profits as a service fee which affects OP and ultimately eps and P/E ratio
Hence the build up in payables( paid out quarterly or half yearly I would guess

Normally the Company would consolidate 100% of earnings and show the local holding as a minority
Money then dividended out of the local operating company would reduce their balance sheet interest

[bo doodak] 11/4/2018 17:16

I'm not sure from comments since results why anyone would realistically think mgt will alter their approach. Mgt operate to their own internal agenda, and if we as investors benefit, this is always incidential, since N has stated clearly he doesn't value the importance of share price That's the history of the company.

[polaris] 11/4/2018 16:58

The FY2018 upper end for eps is close to 37.5 c, suggesting an upper price target in the 210-215p area, so the range is quite wide.

I do agree there is an issue with management openness, newsflow and what to do now the company is benefitting from this part of the commodities cycle.

[polaris] 11/4/2018 16:52

My other notes from the, rather short, FY2017 announcement are:

Cash at end of period of $26.5M and a realistic expectation of another $50M+ to add to that in FY2018.

The options out there have the potential to reduce eps by quite a lot. I think there remain some 25M options at various prices from 30p, although realising them will give some cash to the pile.

One thing that concerned me in the figures is the 18M growth in current liabilities to over $50M. I will want to see how that progresses in H1 announcement.

The preparation of the figures still uses an outdated spreadsheet, adding the gross assets and liabilities rather than subtracting the latter from the former! However, the effective assets per share calculation at the bottom remains correct.

TBH, if they can realise something useful with the cashpile then i am happy to not see a dividend. Any movement on zone II will take considerable cash to prepare for mining. This can come from existing cash. However, the zone II license has been a long story and i will not believe it until i see it.

Zone II has the potential to add 60% to bottom line IMO by filling the mill.