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Griffin Mining, West African Minerals Corporation, Wolf Minerals news briefs

Contributed by Fox-Davies Capital

Griffin Mining has received approval to double the throughput at Caijiaying from 750ktpa to 1.5Mtpa.

In this news:
- Increase includes an expansion of the processing facilities, the underground development of Zone II and an expansion of the existing mining operations at Zone III
- Subject to the successful granting of a mining licence over Zone II, not expected before end 1Q'14
- The development and upgrade not expected to impact existing operations
- Will be funded from cash flow with surplus cash flow directed to repaying existing Chinese banking facilities
- Company will not pay dividend in FY'13.

FD Comment:
The Chairman's statement suggests the Company has been under pressure to pay a dividend, however the Company views that with a projected supply squeeze in the zinc market it would be a better use of funds to develop Caijiaying. We agree as although the zinc market is currently in over supply due to record Chinese production, this is set to change with an estimated 1.8Mt of annual zinc production due to close between 2012-2016, with the biggest impact being the closure of the 500ktpa Century Mine, Queensland in 2016. Combined with increased demand this is expected to result in between 6-8Mtpa of new capacity being required. Our own CY'16 zinc forecast is US$1.2/lb up from the current US%0.88/lb.

West African Minerals Corporation has said that the initial assay results from WAFM's South Djadom drilling has confirmed a large scale near surface hematite mineralisation in Cameroon.

In this news:
- Results of first 42 drill holes in South Djadom intersected hematite and enriched banded iron formation mineralization in 11 holes over a 3km by 2km area
- 8 of these intersected intervals in excess of 30% Fe over a minimum thickness of between 8m and 23m, with 6 of these having grades over 505 Fe
- Testing underway of next 5km by 5km target in the overall 5km by 25km gravity and aeromagnetic anomaly at South Djadom
- Two more drill rigs will be mobilised for infill drilling.

FD Comment:
This is still a very early stage project and the results to date concur with the geophysical data. Over the next few months the Company expects to test the entire 25km long co-incident gravity and magnetic anomaly, especially with the addition of an additional RC and a diamond rig. Grades look a little sketchy at this stage and would need upgrading for export, but we need more results to get an indication of the size, shape and distribution of grades before being able to make a more informed opinion at this stage.

Wolf Minerals has released its 1H'13 accounts to 31 December 2012.

In this news:
- Reported a net consolidated loss after tax of $2,525,567 (1H'11: $1,623,997)
- Wolf completes A$5 million placement to senior shareholders
- Construction of Hemerdon Link Road completed and road opened
- Key environmental approvals received
- Finance providers mandated to seek credit approval for £75 million in project funding
- Credit approval for senior debt funding of £75 million achieved
- Project funding package from RCF for US$82M announced
- $20.3M placement announced and successfully completed post period end
- Introduction of new strategic investor
- New UK head office established.

FD Comment:
Although Wolf finished the period with A$1.51M in cash, having raised A$20.3M post period, securing approval for £75M in debt funding and announcing a US$82M funding package from RCF, it is well placed to complete the construction of Hemerdon. Yesterday's news of the award of the £75M fixed price EPC contract to GR Engineering Services conditional on satisfying the financing arrangements means Hemerdon should be in production within 24 months of construction starting.