The Insider: City deals uncovered

Stakebuilding at Griffin Mining

Griffin Mining has warned that a longer-than-expected shutdown at its Caijiaying zinc-gold mine in China "will inevitably cause disappointing financial results in 2014." Shareholders will also have to wait until at least June for the plant to hit its 1.5 million tonnes of ore per annum.

Now, just days after the shares sank near to a six-year low, non-executive director Adam Usdan has been stake-building. Since last week, the head of Trellus Management, the US equity hedge fund he founded 20 years ago, has been buying shares furiously.

He bought 750,000 shares in three equal tranches at 26.5p a share. Usdan now owns over 30 million shares, or 16.8% of the company, worth £8 million.

Clearly, Usdan is bullish now that the plant is back up and running and has reached the equivalent of about 900,000 tonnes per annum throughput. And chairman Mladen Ninkov didn't think the hold-ups were too much of a problem.

"The price has been worth paying to position the company to be a globally significant zinc producer with substantial precious metal credits with the expected and much discussed global shortfall in zinc supply expected in 2015 and beyond," he said. "It is with this expectation that shareholders should reap the benefits of their patience."

Delays mean house broker Panmure Gordon has reduced expectations for 2014, but still reckons Griffin will process 1.05 million tonnes (Mt) of ore in 2015 for zinc production of 47 thousand tonnes (kt).

"Clearly the delays experienced in the execution of the expansion to 1.5Mtpa are a disappointment for Griffin; however, the longer term picture remains intact. We remain positive on the value proposition and our 92p price target is unchanged," says an optimistic Panmure.

Bargain hunting after Scholium warning

Scholium (SCHO) listed on AIM in March last year, raising £8 million at 100p per share, but there's been little good news since. Now, the dealer in rare and antiquarian books is selling its South Kensington operations to its own chief executive Philip Blackwell, who will leave Scholium next month, for £140,000.

That leaves Scholium with its Shapero Rare Books business where sales have been slowing, and a sculpture, coins, paintings, and ceramics division which has just failed to seal a "significant" deal. Revenue and profit will now be less than expected. "In the worst case [it] could experience a substantial reduction in profitability," we're told.

"Despite the disappointing performance in the current year, the group remains strong with healthy levels of cash and excellent stock," says executive chairman Jasper Allen. "With a clear focus on Shapero Rare Books and Scholium Trading, we are working hard to secure larger transactions, which have a significant impact on profitability, and continue to have a positive outlook for the future of the group."

That confidence perhaps explains why bosses have been snapping up stock. Non-executive director Thomas Jennings has bought 1.2 million shares at 42p, taking his stake to 21.6%, and finance director Simon Southwood picked up 20,000 at 47.9p. A day later, Blackwell bought 18,750 at 48p, leaving him with 14.6% of the company, and non-exec Charles Sebag-Montefiore paid the same price for 20,000 shares.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.