GFM Griffin Mining Limited

RNS Number:4479Z
Griffin Mining Ld
23 February 2001


- Completion of Scoping Study and Move to Production

- Equity Placement and Proposed Grant of Warrants

- Notice of Special General Meeting


Griffin Mining Limited  is pleased to announce that it is raising up to US$2.5
million by way of a placing of new ordinary shares with institutional and
other clients of Griffin's nominated broker, Charles Stanley and Company
Limited, to complete the remaining matters required under the Chinese Mining
Law of 1998 to convert Griffin's exploration licence over the Caijiaying zinc
gold project into a mining licence so as to enable Griffin, subject to the
necessary capital being available for construction of the mining and
processing facilities at Caijiaying, to commission the Caijiaying mine and for
general working capital purposes.

An independent scoping study commissioned by the Company in 2000 has been
completed which indicates that for an initial capital cost of US$6.7 million
an underground mine could be brought into production at Caijiaying to process
primarily some 180,000 tonnes of ore per annum at 12.3 per cent zinc, 0.7
grams per tonne gold and 48 grams per tonne silver over a minimum of 10 years.
At this level of production, current metal prices, with no changes in the
taxation regime in the PRC and assuming costs as estimated in the scoping
study (before any depreciation charge), Caijiaying would be expected to
generate after tax revenues, at the project level, of approximately US$5.5 to
US$6 million per annum.

Due to the results of this scoping study, Griffin's work on the Caijiaying
project and the positive developments in the Chinese legal environment, the
Company has formed the view that Caijiaying is capable of being developed
immediately to economically produce zinc, gold, silver and possibly other
minerals.  Consequently, and subject to the successful raising of the
necessary capital required to bring Caijiaying into production, the Company
has decided to move forward as quickly as possible to construct and commission
the Caijiaying deposit as an underground mining operation.


SPECIAL GENERAL MEETING

The market price of the Company's ordinary shares quoted on the Alternative
Investment Market ("AIM") of the London Stock Exchange is currently less than
the par value of Griffin's ordinary shares of 10 cents. As a result the
placing is being carried out at a price close to the current market value of
the Company's ordinary shares. Therefore, in accordance with the Company's bye
laws and in order to complete an equity placing, Griffin is seeking the
approval of the members at a Special General Meeting to be held on 15th March
2001 for a reduction in the par value of the ordinary shares from 10 cents to
1 cent per share. 


THE ISSUE OF WARRANTS AND OPTIONS

Subject to the passing of the resolutions to reduce the par value of the
shares at the forthcoming Special General Meeting and the completion of the
placing to raise up to US$2.5 million, it is proposed to give existing
shareholders the opportunity to subscribe for additional ordinary shares at
the placing price. This is to be effected by way of a bonus issue of warrants 
to existing shareholders on the basis of 1 warrant for every 2 ordinary shares
held. Each warrant will entitle the holder to subscribe for one new ordinary
share at the placing price on or before 15th May 2001.
 
No consideration will be payable in respect of the issue of the warrants,
which is conditional on the passing of the resolutions at the forthcoming
Special General Meeting of the Company to reduce the par value of the ordinary
shares of the Company, the approval of the Bermuda Monetary Authority to the
issue and any subsequent exercise of the warrants, and on the prior completion
of the placing. It is not the Director's intention for application to be made
for the warrants to be admitted to trading on AIM or the Canadian Venture
Exchange.

A circular is being sent to shareholders today to provide further details of
the proposed grant of warrants to the shareholders of Griffin to subscribe for
new ordinary shares in the Company, together with notice of the holding of a
Special General Meeting to be held on 15th March 2001 for the purpose of
approving a reduction in the par value of the ordinary shares.

Upon the completion of the placing to raise up to US$2.5 million, the
directors will address the position of options to purchase new ordinary shares
in the Company by the directors and management of the Company at a price above
the placing price.


TIMETABLE

The timetable relating to the grant of warrants, assuming the completion of
the placing to raise upto US$2.5 million and the passing of resolutions at the
Special General Meeting for a reduction in the par value of the Company's
ordinary shares is as follows:

Posting of circular 23rd February 2001
Record date for warrants 9th March 2001
Marked ex bonus 16th March 2001
Issue of warrants 16th March 2001
Commencement date for trading of new shares on AIM 16th March


Further information

Roger Goodwin - President                                                
Telephone: +44(0)20 7663 9855

Charles Dampney - Charles Stanley                                         
Telephone: +44(0)20 7739 8200

Leesa Peters - Golin/Harris Ludgate                                         
Telephone: +44(0)20 7216 4512

Griffin Mining Limited's shares are quoted on the Alternative Investment
Market (AIM) of the London Stock Exchange (symbol GFM) and traded on the
Canadian Dealing Network in Toronto (symbol GRFM). 
The Company's news releases are available on the Company's web site:
www.griffinmining.com

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