Griffin swallows Yukon Zinc

Yukon Zinc and Griffin Mining have signed an Agreement whereby Griffin will acquire all of the issued shares of Yukon Zinc through a court-approved plan of arrangement. After completion of the transaction Griffin will have a strong balance sheet with over C$200 million in cash. It will hold a 60% interest in the low-cost Caijiaying zinc-gold-silver-lead mine in Hebei Province China and a 100% interest in the high grade advanced zinc-silver-copper-gold-lead Wolverine Project located in Yukon Canada.

When the Wolverine Project achieves full production status, projected annual zinc production in concentrates from Caijiaying and Wolverine will exceed 150 Mlb and annual payable silver production will exceed 4.5 Moz. There will also be significant quantities of copper, gold and lead production. There is also exciting exploration and development potential in the vicinity of the Caijiaying mine in China and in the Yukon Zinc’s Finlayson District and other exploration properties.

Harlan Meade, President and CEO of Yukon Zinc, said, “The transaction with Griffin will result in the development of the Wolverine deposit, which is projected to become a very low cost producer. Yukon Zinc’s properties and exploration expertise will complement the development and financial strengths of Griffin and provide an attractive growth outlook for Yukon Zinc and Griffin shareholders. We believe that this transaction represents an excellent value proposition for our shareholders and provides a bright future.”

Mladen Ninkov, Chairman of Griffin, stated, “This transaction fulfills the stringent economic and geological and political criteria the company has imposed upon itself. Yukon Zinc will add a high grade, profitable mine to Griffin’s portfolio and add extensive exploration acreage in one of the most exciting base metals regions in the world. The returns for existing Griffin shareholders and our new Griffin shareholders through Yukon Zinc will be very exciting. We couldn’t be more pleased.”

The acquisition of Yukon Zinc by Griffin is to be completed by way of a court-approved Plan of Arrangement whereby each shareholder of Yukon Zinc will receive one-ninth of an ordinary share of Griffin for each common share of Yukon Zinc held. Outstanding warrants and options of Yukon Zinc will be converted into Griffin warrants and options by multiplying the number of warrants and options held by the Exchange Ratio. The exercise price of the warrants and options will be adjusted to a number equal to the current exercise price, divided by the Exchange Ratio. The expiry dates of the warrants and options remain unchanged. The transaction is subject to a number of conditions that are customary for transactions of this nature.

Griffin is a Bermuda based mining and investment company listed on the Alternative Investment Market of the London Stock Exchange (symbol GFM). Griffin, through its two Chinese joint ventures has a controlling interest in mining and exploration licenses over 67 kmat Caijiaying in the Hebei Province in China. Within this area Griffin has successfully commissioned the Caijiaying mine and processing facilities, with a current throughput rate of some 500,000 t/y of ore to produce a zinc concentrate and a separate lead concentrate containing gold and silver for sale in China. Griffin has a 60% interest in the Caijiaying mine and mineral interests covering the above, but is entitled to 100% of the net cash flows from Caijiaying for the first three years from the commencement of commercial production in July 2005.

Continuing exploration in the area surrounding the mine at Caijiaying and within Griffin’s local Chinese joint venture’s tenement boundary has shown the area to be highly prospective, indicating significant potential for further economic base and precious metals mineralisation. Considerable progress has been made in defining a separate resource at the Zone II area some 1.5 km to the south of the mine at Caijiaying.

Griffin reported a profit after tax of $18,010,000 for the six months ended June 2007 and total assets of $88,926,000. In August 2007 Griffin completed a placing of shares at for total proceeds of £75 million ($152 million) and currently retains cash resources in excess of $200 million.

A bankable feasibility was completed for the Wolverine Project by Wardrop Engineering in January 2007 indicating favourable project economics. The project has all of its main development permits and enjoys strong support from the Yukon Government and its local First Nations communities.