Griffin Mining Limited · LSE:GFM
Griffin Mining — Investor Presentation (2003)
24 slides from Griffin Mining's investor presentation, Jul 31, 2003
Slide 1: Griffin Mining
GRIFFIN MINING
Slide 2: Corporate Overview
CORPORATE OVERVIEW • London Stock Exchange AIM quoted company • Capital Structure – 103m shares trading at 13p per share with market capitalisation of £13.3m – 10m options at various strike prices up to 20p per share • Cash and tradeable securities of $1.75m • Management team with mining, emerging m
Slide 3: Caijiaying Site - Winter
CATJTAYING CAIJIAYING SITE - WINTER
Slide 4: Project Area
PROJECT AREA • Located 200km north west of Beijing accessible via freeway and sealed road • JV Company issued first Exploration Licence under new 1997 Chinese Mining Law in October 1998 • Exploration Licence over 102 sq. km surrounding original licence area granted in June 2000 • JV Company issued f
Slide 5: Regional Geology & Zones of Known Mineralization
REGIONAL GEOLOGY & ZONES OF KNOWN MINERALIZATION
Slide 6: JORC Code Zone III Resource Statement
JORC CODE ZONE III RESOURCE STATEMENT • Zinc: Indicated & Inferred Resource – 23.6 m/t @ 8.08 % Zn at a 4% cut off – 10.56 m/t @ 11.63 % Zn at a 7% cut off • Gold – 2.61 m/t @ 6.78 g/t Au at a 3 g/t cut off – 1.675 m/t @ 8.63 g/t Au at a 4 g/t cut off – 1.265 m/t @ 10 g/t Au at a 5% cut off • 1,230,
Slide 7: Caijiaying Long Section
CAIJIAYING CAIJIAYING LONG SECTION 90 40008 Section 5110E 38-8000 49 400m Section SO00E —- REFERENCE n Ore Blocks (46 GRIFFIN MINING LTD Caijiaying Deposit Fig. 3 Combined Section 5000E and 5110E Showing 4% Zn Ore Outlines with Present and Planned Development
Slide 8: Project Strengths
PROJECT STRENGTHS • Underground mining operation selected due to low capital cost, long life, high profitability and high rate of return • Metallurgically simple • Connected to grid power, large water resources and gentle terrain • Substantial tax benefits – 0% in years 1 & 2 – 10% in years 3 to 5 –
Slide 9: Caijiaying Zinc Mine – General Arrangement
CAIJIAYING ZINC MINE – GENERAL ARRANGEMENT
Slide 10: Caijiaying Zinc Mine – Preliminary Site Layout
CAIJIAYING ZINC MINE – PRELIMINARY SITE LAYOUT
Slide 11: Production & Operating Costs
PRODUCTION & OPERATING COSTS • Ore processed per annum 200,000 tonnes • To produce 22,000 tonnes of zinc metal • Lowest quartile operating costs at $602 per tonne of zinc produced – Smelter charges per tonne of concentrate $150 – Mining costs per tonne of ore processed $12 – Milling costs per tonne
Slide 12: Major Chinese Zinc Producers
MAJOR CHINESE ZINC PRODUCERS RANK PRODUCERS PRODUCTION, ‘1000 METAL CONTENT 1 Nonfemet 94,882 2 Huizhe Lead & Zinc Mine 74,720 3 Baiying Nonferrous 61,866 4 China Tin Group 67,295 5 Nanping Nonferrous 60,447 6 Longquan 32,239 7 Wenshandulong Tin Mine 32,130 8 Huidong Lead & Zinc Mine 26,471 9 Baiyin
Slide 13: Projected Operating Results
PROJECTED OPERATING RESULTS • Plant construction and commissioning $10m • At $950 tonne zinc price (no gold), after tax project profits $4.5m per annum, internal rate of return to project 43% and 2 year capital payback • At $723 tonne zinc price, operating break even (no gold) • Significant financia
Slide 14: History
HISTORY • Resource discovered by Chinese in 1967 who completed 95,000 metres of diamond drilling • US$3.7 million spent by Griffin subsidiary with 10,000 metres of diamond drilling and 300 metres of underground driving completed. • Programme of exploration, pre-feasibility and development completed
Slide 15: Inspecting Core at Site Office
INSPECTING CORE AT SITE OFFICE Mladen Ninkov, Chairman, Griffin Mining; Rupert Crowe, CSA; Warren Woodhouse, CSA & Roger Goodwin, Finance Director, Griffin Mining
Slide 16: Trial Decline into Zone III
TRIAL DECLINE INTO ZONE III
Slide 17: Legal Structure
LEGAL STRUCTURE • Joint venture company, Hebei Hua’ Ao Mining Development Company Limited, established in 1993 • Chinese partners – The Ministry of Land and Natural Resources – The Zhangjiakou City Government – The Third Geological Brigade • Griffin has a 60% interest (80% until capital payback) – C
Slide 18: Joint Venture Board of Directors & Management
JOINT VENTURE BOARD OF DIRECTORS & MANAGEMENT From left to right: Mr Jin Shengchang, CFO, JV; Mr Pei Xiaodong, Dir 3 rd Brigade; Mr Jeff Haitian Sun, Chief Rep China, Griffin Mining; Mr Zhao Quanle, Dep Dir MLR & Dir JV; Mr Mladen Ninkov, Chairman Griffin Mining & JV; Mr Zhang Baoyi, Mayor of Zhangj
Slide 19: Exploration Potential
EXPLORATION POTENTIAL • Potential to add significant gold & zinc reserves by drilling between mineralized Zones II & III • Drilling and other work in Zones II, IV and V indicate significant potential for discoveries of zinc, gold, copper and other metals • Exploration licence over 102 sq. km of high
Slide 20: Regional Geology Showing Epithermal Gold Targets
REGIONAL GEOLOGY SHOWING EPITHERMAL GOLD TARGETS
Slide 21: Risk Factors
RISK FACTORS • China political and country risk – Entry into World Trade Organization in 2002 – Overtook the USA to become the largest recipient of foreign direct investment with inflows of $90 billion – Establishment of Shanghai Gold Exchange providing transparent price for gold • Zinc price – Chin
Slide 22: Chinese Zinc Concentrates Import / Export
CHINESE ZINC CONCENTRATES IMPORT / EXPORT
Slide 23: Chinese Zinc Production 1996 - 2002
CHINESE ZINC PRODUCTION 1996 - 2002
Slide 24: Summary
SUMMARY • Management team with clear strategy to deliver value • Company with extensive experience and presence in China • Well structured and legally secure joint venture with foremost issue of exploration and mining licences in China • Zinc & gold resource defined, pre-feasibility study completed