Global Gold Corp. (GBGD)

[BMAV1]

GBGD Overstates Mining Volumes by 104%

I recently received copies of a letter including a summary of production reports filed by MEGO-GOLD LLC, a Global Gold subsidiary for production at the TOUKHMANUK GOLD MINE in Armenia.

The letter was issued by the Chief of Staff of the Minister of Energy and Natural Resources, Mr. Karen Kagramanyan, (MENR) following an access to information request by Mr. Arthur Grigoryan, the President of “ECOLOGICAL RIGHT", an Armenian Environmental NGO.

I have compiled the data and have compared it with the mining volumes published by GBGD in its December 31, 2012 annual 10-K report. The report is signed by Mr. Van Z. Krikorian as CEO and the rest of the Board of Directors and audited by RBSM LLP of New York.

Since 2006, GLOBAL GOLD CORP (otcqb: GBGD) has overstated its mining volume by 104% from its Toukhmanuk Gold Mine located in Armenia.

In the 10-K report, as filed with the United States Securities and Exchange Commission (SEC), for the year ending December 31, 2012, Mr. Krikorian and his board certified the following statement:

The Company has mined mineralized rock of approximately 52,000 tonnes in 2006 with content of approximately 1.27 g/t gold and 6.37 g/t silver, no mining in 2007, approximately 82,000 tonnes in 2008 with content of approximately 1.85 g/t gold and 5.21 g/t silver, no mining in 2009, approximately 21,000 tonnes in 2010 with content of approximately 2.08 g/t gold and 5.68 g/t silver, approximately 21,400 tonnes in 2011 with content of approximately 0.92 g/t gold and 3.32 g/t silver, and no mining in 2012.

The production records filed by Global Gold in Armenia paint a different story. Below is the translation of the table received from the MENR. This table is drawn from the official reports of production at the TOUKHMANUK GOLD MINE filed by MEGO-GOLD, since 2006.

TABLE 1

Converting the GBGD data to conform to the Table provided by the MENR we see a different picture emerging.

TABLE 2

Converting the Armenian data to conform to the GBGD data published in its 10-K we get the following table:

TABLE 3

In 2006, GBGD claimed it mined 52,000 tones of ore when it actually mined 12,100 tones of ore. In 2008, GBGD claimed it mined 82,000 tones of ore when it actually mined 45,660 tones of ore. Meanwhile the GOLD content remains the same, at approximately 66 kg, even-though the volumes differ dramatically. This implies the grade of the ore for 2006, as filed with the MENR, graded for Gold was approximately 5.45 g/t but the grade for Gold reported by GBGD in its SEC filings was 1.27 g/t. The ore for 2008, as filed with the MENR, graded approximately 3.34 g/t, but GBGD reported in its SEC filings that it was 1.85 g/t.

In 2010, GBGD claimed it mined 21,000 tones of ore with a Gold grade of 2.08 g/t, equivalent to 43.68 kg of Gold content. The official Armenian records show that GBGD mined 16,800 tones of ore with Gold content of 18.31 kg of Gold content, equivalent to 1.17 g/t. Global Gold overstated Gold mined in 2010 by 24.1 kg in its SEC filings.

In 2011, GBGD claimed it mined 21,400 tones of ore with a Gold grade of 0.92 g/t, equivalent to 19.69kg of Gold content. The official Armenian records show that GBGD mined 11,860 tones of ore with Gold content of 18.31 kg of Gold content, equivalent to 1.54 g/t. Global Gold overstated Gold mined in 2011 by 1.38 kg in its SEC filings.

No investor can now TRUST what the real grade of the TOUKHMANUK Gold Mine is. Global Gold reports one grade with the MENR and a different grade in their audited financial statements filed with the SEC. This is a huge problem for Global Gold since investors rely on published grades to evaluate the value of gold assets. Have investor's in Global Gold been misled?

Is Global Gold Corp. (GBGD), Mr. Van Z. Krikorian and Mr. Ashot Poghossyan willfully and knowingly conspired to file false and misleading statements in their 10-K Audited Financial Statements or have they actually filed false reports with the Ministry of Energy and Natural Resources of the Republic of Armenia (MENR)?

There clearly has to be an investigation by the SEC, PCAOB and the MENR to find out what the real truth is.