Global Gold Corp. (GBGD)

[BMAV1]

Global Gold NOT Operational

Global Gold Corp. (otcqb: GBGD) finally released its annual report for the year ending December 31, 2012 and admits it has no active mining operations in Armenia.


Toukhmanuk Not Operational

GBGD's flagship property did not operate in 2012 and the Company had NO REVENUE in 2012. Global Gold admits it can't operate until a new tailings pond/damn is built at its Toukhmanuk Gold Mine in Armenia.

On page 34 of their Annual 10-K Financial Report GBGD States:

"During the twelve-month period ended December 31, 2012, the Company did not have any revenue which represented a decrease of $81,702 from $81,702 in the same period last year. The decrease in revenue is attributable to a decrease in sales of gold concentrate of $81,702 from the Toukhmanuk property because of operational funding delays, needing a new tailings damn, and the status and funding of the Consolidated Resources joint venture."

Local Environmental NGO's have also been lobbying the Government of Armenia and rallying the public opinion to stop mining at the Toukhmanuk site too. (see my other blog at at: http://toukhmanuk.blogspot.com/2013/04/ngos-are-all-out-in-full-force-to-stop.html )

As of December 31, 2012, GLOBAL GOLD CORP had debts of US$ 8,319,727 and only US$ 3,391of cash and no prospect for cash generation at the Toukhmanuk site until the tailings damn is built and funding comes in to operate the mine.

Auditor's Raise Concern About GBGD Ability to Continue to Operate

The Auditor's for GBGD, RSMB LLC (http://www.rbsmllp.com) issued a warning in their letter to shareholders of GBGD, that the Company's financial condition raises serious doubt about their ability to continue to operate. RSMB States:

"...The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses as more fully described in Note 2. These issues raise substantial doubt about the Company's ability to continue as a going concern.

/s/RBSM LLP

New York, New York

April 15, 2013"


Toukhmanuk also in Default of its Mining Obligations

To make things worse for Global Gold they now have disclosed they have been misleading investors for the last 4 years about their mining requirements at Toukhmanuk Project.

Global Gold since 2009 has been informing investors that it must mine 80,000 tonnes of minarealized rock every year and invest $1,200,000.

In their recent financial statement they now state that they must mine 168,500 tonnes per year of mineralized rock.

On page 10 of GBGD's financial statements the Company states:

"...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 168,500 tonnes of mineralized rock at the property as submitted and approved in its mining plan in order to maintain the licenses in good standing."

Company admits that it has only mined a total 124,400 tonnes since 2008 (last 4 years) significantly less than the required 674,000 tonnes it had to mine over 4 years at 168,500 tonnes of mining per year, as further described below:

Excerpt from 10-K page 11

"... 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. "

[Note:
Year: Tonnes
2008: 82,000
2009: zero
2010: 21,000
2011: 21,400
2012: zero
Total: 124,400 tonnes]

The Global Gold is definitely in technical default of its obligations under their mining license and mine plan and faces serious and real risk that it may loose its only real asset, the Toukhmanuk Gold Mine. A RISK they have failed to fully disclose in their financial statements or what actions they have to take to resolve this technical default.

see original post at http://toukhmanuk.blogspot.com/