Caijiaying Update

4 Dec 2006 07:01

Griffin Mining Ld04 December 2006 GRIFFIN MINING LIMITED 60 St James's Street, London SW1A 1LE, United Kingdom Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773 E mail: griffin@griffinmining.com 4th DECEMBER 2006 UPGRADE OF PROCESSING FACILITIES AT CAIJIAYING ZINC GOLD MINE TO 500,000 t.p.a. in 2007 750,000 t.p.a. in 2008 GRIFFIN CASH HOLDINGS $33 MILLION Griffin Mining Limited ("Griffin" or the "Company") is extremely pleased toannounce that it has concluded a feasibility study on the upgrade to theCaijiaying mine processing facilities and, based on the conclusions of thatstudy, the board of Griffin has resolved to upgrade the Caijiaying processingfacilities to enable the processing capacity to be increased from thecommissioning capacity of 200,000 tonnes of ore per annum ("t.p.a")(subsequently increased to 350,000 t.p.a.) to 500,000 t.p.a. in 2007 and to750,000 t.p.a. in 2008. The initial plant upgrade in 2007 will enable a precious metals concentratecontaining gold, silver and lead to be produced for sale in China. This first stage of the upgrade will be achieved by the addition of floatationand scavenger cells, an inline pressure jig, a new power line and sub-station,the construction of a new backfill plant and a new precious metals circuit, allto be completed by the end of summer 2007. This will increase the processingcapacity to 500,000 t.p.a. The cost of these additions is estimated to be $4.8million. The second stage will consist of a new SAG mill circuit to be ordered in 2007with delivery and installation to be completed in 2008. This will increase theprocessing capacity to 750,000 t.p.a. The cost of this addition is estimated tobe $2.3 million. All capital expenditure will be met by the current cash reserves of the GriffinGroup of companies which currently amounts to $33 million. The Company has nodebt. The increased throughput is expected to substantially increase revenues as aresult of greater zinc metal production and the introduction of a new revenuestream from the production of precious and other base metals. The Company will immediately proceed to complete detailed designs for theupgrades, expected to be completed in the second quarter of 2007. A revised JORC compliant resource statement for zone III at Caijiaying isexpected shortly. Mladen Ninkov, Griffin's Chairman, commented as follows: "This is yet another outstanding result for the shareholders of Griffin whichhas been achieved by the dedication and talent of the employees and contractorsof the Company. All facets of the Company's asset base continue to improveincluding the size of the orebody, the talent of the Griffin team and theeconomic and political stability which China provides." Further information Mladen Ninkov - Chairman Telephone: +44(0)20 7629 7772Roger Goodwin - Finance DirectorGriffin Mining Limited Adrian Hadden / Christopher Rollason Telephone: +44(0)20 7523 8353Collins Stewart Europe 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). The Company's news releases are available on the Company's web site: www.griffinmining.com This information is provided by RNS The company news service from the London Stock Exchange