Global Gold Corp. (GBGD)

[BMAV]

Will GBGD Lose the Toukhmanuk Project in Armenia?

Not only should Global Gold lose their license to the Toukhmanuk and Getik projects in Armenia, they KNOW that it is a real risk, and have failed to disclose as much, in their financial statements and their SEC filings.

Global Gold does state in their 10-K filing for December 31, 2012 the following:
The Toukhmanuk property is a lode deposit which is being mined using an open pit method. The Company has one National exploration license #15, as extended, covering approximately 10,915 acres for sub-surface exploitation of gold.The Company also has one National mining license #HA-L-14/356 which covers the central section of the property and is approximately 446 acres for mining gold and silver. The Company is required to pay annual governmental fees of approximately $32,000. The Company is also required to spend annually approximately $1,200,000 on exploration work and mining annually 80,000 tonnes of mineralized rock at the property as submitted and approved in its mining plan in order to maintain the licenses in good standing.
Global Gold has failed to disclose to investors that they have not met these license requirements and that the license is currently not in good standing.

These misrepresentations are a breach of SEC regulations and probably constitute FRAUD by Global Gold, Mr. Van Z. Krikorian, CEO and Corporate Counsel, Jan Dulman, CFO and registered CPA, and its Directors, Ian Hague (of FireBird LLC and the largest Shareholder of GBGD), Nicholas J. Aynilian, (Owner of Vanick Properties in NJ), Harry Gilmore, (Career US Foreign Services employee and the First Embassador to Armenia for the USA) and Drury J. Gallagher, the Chairman Emeritus of GBGD and one of its original Managers.

Every Board Member and all the management of Global Gold know these facts but they fail to make adequate disclosure to investors so that it can be clear that GBGD has not met the license requirements and currently is not in good standing and the Armenian Government has every right to cancel their license for non-performance.

For the average investor to figure this out, he would have to go through the whole 10-K and find one little sentence buried in a paragraph on page 11 of the 10-K report that reads:

In 2008, GGM upgraded the plant and lab, installed a new gold room, recommenced mining and production of concentrate, and continued its analysis of the prior year’s drill results. Also, the Company compiled its reserve report and submitted it to the state committee on reserves of Armenia in March 2009 (please refer to the “Cautionary Note to U.S. Investors” on page 3 of this report). The Company has generated minimal sales from gold and silver concentrate from the property. Sales were approximately $6,000 in 2006, $10,400 in 2007, nothing in 2008, $136,600 in 2009, $358,400 in 2010, and $81,702 in 2011. he 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, and approximately 21,400 tonnes in 2011 with content of approximately 0.92 g/t gold and 3.32 g/t silver. As of December 31, 2011, the Company has spent approximately $10,260,000 on mining and exploration activities at this property, excluding acquisition and capital costs.

Nowhere in the the SEC filing, 10-K report of December 2011 does it state the anything like this:

THE COMPANY HAS FAILED TO MEET MINIMUM PRODUCTION REQUIREMENTS UNDER THE MINING LICENSE AND AS SUCH IS NOT IN GOOD STANDING. IF THE COMPANY DOES NOT CORRECT THIS OR MAKE OTHER ARRANGEMENTS WITH THE AUTHORITIES OF GOVERNMENT OF ARMENIA, THE LICENSES MAY BE AT RISK OF CANCELLATION DUE TO NON-PERFORMANCE OF LICENSE REQUIREMENTS.

Now that would be proper disclosure !

Below is a table of the actual production recorded by Global Gold on the Toukhmanuk Gold Mine from 2006 to 2011. This information has been compile form GBGD's SEC filings.

Link to Blog and Table


** I am not sure if the 2006 production number is true it may only be 30,000 tonnes considering the 10KSB filed in 2006 states:
In 2006, Global Gold Mining drilled over 10,000 meters of exploration for gold and polymetallic mineralization at Tukhmanuk, mined approximately 30,000 tonnes of ore, and engaged in small scale, experimental processing of concentrate at the pilot plant. **