Griffin Mining Share Discussion Threads

[polaris] 27/9/2018 17:02

rmjones - yes, metals reaching B/E levels, approximately 20% drop from where we stand now.

[rmjones] 27/9/2018 16:42

Polaris:-
"Right now, i cannot see metals reaching these values ..."

Current Zinc=$2576/tonne
Gold= $1200 / oz
Silver is $14.40
Lead: $2060

Do you mean you can't see metal prices FALL to the break-even levels?

[sageman] 27/9/2018 16:38

Good to see 86p being retested today. Hopefully it will hold and provide additional support. In terms of zinc we are struggling to breach $1.15 and have not gone through $1.20 meaning that the downward trend remains in tact for now. I would like to see the $1.035 level be tested to confirm support. Once that happens I will feel much happier that 86 will hold. Lots of posters here still looking day to day rather than watching the trend.

[mariopeter] 27/9/2018 15:55

Thanks for your work Polaris.

[millwallfan] 27/9/2018 15:24

Polaris. Given the uncertainties of production levels and commodity prices I feel you have outlined 3 reasonable scenarios. Other potential positives are the declining world zinc stocks and of course the final licence approval to ramp up production. Zinc could of course fall further but hopefully has bottomed out. Trumps sanctions are another unknown but not sure could be much worse than at present. In conclusion I feel your middle option is probably the most realistic. As I have commented before I still believe in the fundamentals of a debt free, quality miner whose directors have a lot of skin in the game and as such will hold for now.

[polaris] 27/9/2018 15:00

Ran three quick scenarios through as follows:

1. H2 to be same as H1 in production terms with similar smelting charges and current metals prices
2. a H2 based on half of the total production stats from 2017 with similar smelting charges and current metals prices
3. A full recovery to give FY2017 total production stats with similar smelting charges and current metals prices

Assumptions: smelting charge $680 (calculated as 100 dma Zn price - price stated in H1 18 figures), metals in concentrate value of 90% for byproducts (Pb, Ag, Au value), 4.5% royalty on gross revenues from metals value, CoS to remain at $23.35M, Admin to remain at $9.7M, conversion of Gross profit to PAT of 70% and current metals prices of Zn $2500, Pb $2000, Ag $14.3, Au $1190.

So a whole set of assumptions for people to break down!

Scenario 1 leads to FY revenues of $95.5M and PAT of $21.3M giving EPS of 12.5c
Scenario 2 leads to FY revenues of $105.5M and PAT of $28.2M giving EPS of 16.5c
Scenario 3 leads to FY revenues of $115M and PAT of $33M giving EPS of 19.3c

As GFM have a long LoM then i would stick a multiple of 8-10 on earnings to get trading ranges.

The obvious points to discuss are the likely metals prices for H2 2018 cf. using just todays prices, and the likely direction of metals prices for the rest of the year.

My estimates suggest GFM need metals prices to stay above $2000 for Zn, $1600 for Pb, $11.50 for Ag and $1000 for Au to cover CoS, Admin, royalties and the profit share.

Right now, i cannot see metals reaching these (edit - i mean B/E) values and GFM seems to be attractively priced IF (underlined) production stats for H1 are a one-off and a scenario 2 is the most likely outcome for H2.

The lower metals prices will also impact FY19 onwards if there is no recovery, such that HY19 (note the half year here) onwards EPS would be something like 7c, based on scenario 2.

Bearing in mind that all of the H2 numbers are based on today's metal prices and not the moving averages, whereas H1 are based on reported numbers, and all production stats are based on FY17 and H1 18 reported numbers, then we are approaching a valuation that implicitly assumes that H2 will be in-line with H1 in production terms.

If this is the case then HY19 onwards EPS is around 3c, implying still some way to fall to find the bottom.

Discuss.

[podgyted] 27/9/2018 09:50

SP 6/8/18 142p , 26/9/18 88.5p - Fall 38%

POZ 6/8/18 $2,585 , 26/9/18 $2,545 - Fall 2%

6/8/18 = day before release of half year accounts.

Today so far - share price fall now 39%, zinc fall 1%

[alangrifbang] 27/9/2018 09:00

Zinc up again and griffin down,surely it's the right time to buy,

[podgyted] 26/9/2018 18:44

Next week is the Chinese Golden Week holiday - think we could see some strange POZ movements due to this.

[alangrifbang] 26/9/2018 18:21

Very puzzling this price,at least it's now trading in a narrow range,read an article where China is getting a bad press about metal prices and if you believe it ,it's going to lag behind ,it DOSENT read very well,personally I'm not going to do anything ,by the time I need to use griffin money I will be 150,

[podgyted] 26/9/2018 17:57

Might challenge 86p again - the previous buy orders may not be there anymore.

[podgyted] 26/9/2018 17:46

Lots of sales today with the POZ going northwards.

Went down when the mining sector staged a rally last week.

Only my opinion, but this share is totally out of favour and there are many better opportunities out there. Even for a quick trading opportunity I can't see any interest here until it starts reacting "normally" to metal price movements.

(Unless there is anything new on zone II the next news won't be until April 2019 based on last year's history - long time to wait.)

[rose_by_another_name] 26/9/2018 17:34

Zinc up, Griffin down. If the share price goes up
tomorrow, we might have a double bottom.

[malcolmmm] 26/9/2018 09:36

sold at 160p,153p,154p,146p and 142p, bought in initially at 63p . They are looking like a buy again with Zinc recovering and I am long silver at the moment

[up just a little bit] 25/9/2018 21:10

https://www.fastmarkets.com/article/3834465/pricing-notice-metal-bulletin-raises-minimum-tonnage-for-european-zinc-premium-assessments

[opodio] 25/9/2018 21:02

Booo rotten tomatoes, 60p coming. Booo sir, i boo you

[up just a little bit] 25/9/2018 20:52

Sage, Why don't you pop over to a certain chartists BB and ask for all the technical details you require. It may take a few days to get your analysis but last time I used him it was quite accurate.

[sageman] 25/9/2018 19:11

Rose, I will post where I like. The fact that you are unwilling/unable to believe what I say does not mean that others are similarly impaired. I posted earlier hoping to hear the thoughts of a decent chartist as I would welcome any technical analysis that they are prepared to share.

[rose_by_another_name] 25/9/2018 14:23

Sage- Please don't waste your time on this
forum. Get back to your meditations. With the
president of the USA powerless to levitate the
price of zinc, we are all reliant on you.

And since there is absolutely nothing the board
can do to affect Griffin's SP, as only the zinc
price matters, I think we ought to just abolish
the board, or at least stop paying them.

[up just a little bit] 25/9/2018 14:05

https://www.allure.com/story/zinc-for-acneSo what we really need are millions upon millions of spotty teenagers!

[sageman] 25/9/2018 13:35

Up, please see my post above. The correlation of the share price to the commodity market is plain to see. However, it is not daily correlated and much depends on the prevailing trend. I am a little unclear why so many here find this a difficult concept to grasp and continue to question when you can easily run graphs spanning several years.

[up just a little bit] 25/9/2018 13:27

Just for Alan on this second post. Note also the decline in the LME Zinc stock as well. However there are other warehouses stocking zinc around the world.

[up just a little bit] 25/9/2018 13:25

So where is the correlation in GFM's share price and zinc. According to some this is the only factor other than silver and gold.

[alangrifbang] 25/9/2018 13:22

Zinc is up the fifth day running,and griffin is down,so it's not the price of zinc that's keeping the share rising,surely it can't be profit taking at this low level,

[sageman] 25/9/2018 10:21

My take FWIW. GFM had a support level of 86/87 and MM quickly took it to this and we bounced. I hope this will hold. In the meantime zinc bottomed at circa $1.035. We need to either retest this or for zinc to move above $1.20 for a new trend to emerge. Hopefully there are some experienced chartists here who can comment on these ranges. In the absence of substantive news via an RNS my view is that the future share price direction will be dictated by where zinc (and to a lesser extent gold) head next. In the meantime Zinc warehouse stock levels continue to move south so fingers crossed that zinc has indeed bottomed.