Griffin Mining Regulatory News (GFM)

17 Jan 2005 07:00

Griffin Mining Ld17 January 2005 17 JANUARY 2005 GRIFFIN MINING LIMITED RESULTS FROM UNDERGROUND DRILLING GENERAL UPDATE ON MINE PROGRESS REGIONAL EXPLORATION UPDATE Overview: - Strong underground drill results have identified new zones of high grade zinc ore not included in the original feasibility study ore reserve. - Mine development and process plant construction proceeding smoothly, on target with overall capital expenditure in line with that budgeted. - Excellent results from magnetic survey providing confidence to undertake a $1million drill programme to quantify highly prospective epithermal gold targets. Griffin Mining Limited ("Griffin" or the "Company"), has carried out furtherunderground drilling tests on its Caijiaying zinc/gold mine in China which haveincreased the potential of the project. The results from the systematicunderground stope-definition diamond drilling programme have exceeded theCompany's expectations in defining high-grade lodes in locations not originallyincluded in the feasibility study ore reserve. Chairman Mladen Ninkov said: "The results of this drilling programme will have asignificant impact on the economic importance of the Caijiaying mine.Caijiaying, as we have already indicated to the market, continues to deliverpreviously unaccounted for new, high grade ore and Griffin is on target forcommissioning this unique mine on time in the spring of 2005." Drill Results The main focus of the drilling programme since July has been to define ore to bemined first above the 1400 level. Mineralization and specifically the "Fu Longlode" (Rich Dragon) above the 1400 level were not included in the feasibilitystudy ore reserve. Previous work defined two parts of this lode but thedrilling has now defined an additional third part to the north. The lodes arenamed the North, Central and South Upper Fu Long Lodes. 1. North Upper Fu Long Lode Of the 18 holes drilled above 1400 level towards the east, results are onlyavailable for 9 holes but these give a good indication of its width and grade ofthis section of the North Upper Fu Long lode: Hole Interval in m Zinc% Silver g/t UGCJY-22 9.1 29.23 103.74+ 5.45 5.47 -UGCJY-24 9.45 24.14 61.32+ 1.8 10.44 36.11UGCJY-27 10.48 18.0 56.47UGCJY-29 2.0 6.88 65+ 1.5 7.41 50+ 2.75 14.98 56.91UGCJY-30 3.25 26.77 86.92UGCJY-31 4.4 22.98 110+ 4.45 7.78 24.27UGCJY-33 4.4 12.53 28.86+ 5.4 13.39 86.11UGCJY-35 11.25 8.4 41.96UGCJY-37 2.05 24.7 35.12 The results show that the central part of this lode is up to 70m long, 50m highand 11m thick. The lode is open below the 1400 level. 2. The Central Upper Fu Long Lode The Central Upper Fu Long Lode has received relatively little further drilling(7 additional holes to date), however, results are available for three holes inthe lower part above 1400 level: Hole Interval in m Zinc% Silver g/t UGCJY-16 3.17 13.49 27.98UGCJY-18 3 7.42 13.33UGCJY-38 10.15 16.65 83.6 Again the evidence indicates a lode of about 60m length and depth and up to 10mwidth although some wider parts are known from trial mining. 3. The Southern Upper Fu Long Lode The Southern Upper Fu Long Lode is still being drilled and results are availablefor only four holes above the1400 level: Hole Interval in m Zinc% Silver g/t UGCJY-17 4.51 9.08 15.59UGCJY-19 3.85 5.58 10+ 1.7 10.48 10UGCJY-21 2.4 9.87 -+ 3.47 7.43 15.48UGCJY-23 12.98 8.74 7.14 This lode is also open below the 1400 level. The remaining results from the Upper Fu Long Lode are expected to be receivedover the next two months and a reserve estimate for this section will becompleted in due course. It is expected that this will further demonstrate thatsignificantly more ore exists than was defined in the original ore reservecalculated from results obtained by the ore body being drilled in the incorrectorientation by Chinese. The underground drilling programme has now moved on to define the size of thenext two lode systems - infill drilling on the Jin Long Lode (Golden Dragon),which is immediately to the west and below the 1400 level drive, and definitiondrilling on the Lower Fu Long Lode (below the 1400 level). Mine Development Mine development is proceeding smoothly and it has been possible to start stopedevelopment ahead of schedule rather than just concentrating on developing orelode access ways as was originally planned. The Fu Long lodes above and 30m to the east of the 1400 level drive have nowbeen substantially developed for full production which will commence once themain mine decline links up with the 1400 level, which is expected in the nextfew days. A second lode system immediately to the west and below the 1400 leveldrive (the Jin Long Lode) has also been accessed by a sub incline off the 1400drive and is also currently being developed for production. A third lode system(the Chang Long or Long Dragon) is currently being drilled and early results areencouraging. Process Plant Construction and Commissioning The main process plant buildings and other infrastructure (water tanks, mainpipelines, initial tailings dam, crusher foundations etc) were sufficientlycompleted in November to allow equipment installation to proceed during winter.All the main zinc process equipment has been delivered to the site and the majorheavy equipment (ball mills and crusher) have been placed on their footings.The gold process equipment has been shipped from Australia and should arrive bythe end of January. Construction of the remaining concrete tanks and gantries inside the mainbuilding is almost complete and installation of the rest of the processequipment will continue over the coming months. The main power line supply hasbeen contracted. Administration and Management The Griffin management team, working in combination with the Chinese engineeringinstitute (ENFI), continue to provide a cost effective and flexible managementsystem, maintaining management control for the benefit of Griffin shareholderswhilst at the same time accessing Chinese expertise in designing and installingtheir own equipment. This system has helped keep costs under control andmaintain timetables. As a result of this policy Griffin has already recruited 80% of its professionalmine management team. The Company intends to continue using existingcontractors for mining tasks and has begun recruitment of the process labourworkforce. The site administration and accommodation are now all complete. Budget The just completed review by senior management has indicated that, afterallowing for forecasted further expenditure, the final capital expenditure priorto production is expected to be in line with that budgeted. Regional Exploration During the summer of 2004, an orientation IP survey was conducted over the ZoneIII mineralization and following this, a comprehensive IP survey was conductedover the area between Zones II and III. A short programme of three surfaceholes was implemented before winter to test some of the anomalies and theresults are expected shortly. On the regional programme, a detailed groundmagnetic survey was completed over the area of epithermal gold anomalies. Thishas yielded excellent results, which will be used to define drill targets fornext summer's gold drilling programme. Further information Mladen Ninkov - Chairman Telephone: +44(0) 20 7629 7772Roger Goodwin - Finance DirectorGriffin Mining Limited Philip Davies Telephone: +44(0) 20 7953 2000Charles Stanley & Company Limited Hugo de Salis Telephone: +44 (0) 20 7242 4477St Brides Media & Finance Ltd Griffin Mining Limited's shares are quoted on the Alternative Investment Market(AIM) of the London Stock Exchange (symbol GFM). Further information on Griffin Mining Ltd is available on the Company's website: www.griffinmining.com This information is provided by RNS The company news service from the London Stock Exchange