Global Gold Corp. (GBGD)

[BMAV1]

IAN HAGUE’S DUBIOUS GBGD SHAREHOLDINGS & SELF-DEALING DEPRIVES FIREBIRD LIMITED PARTNERS AND GBGD SHAREHOLDERS OF POTENTIAL INVESTMENT RETURNS

Link ot original BLOG

In early 2008 things were not going so well for Global Gold Corp. (otcmarkets: GBGD) in Armenia and they were running out of money, so Mr. IAN HAGUE, the "independent director", became GBGD's personal banker.

From February 7, 2008 to December 28, 2009, Mr. IAN HAGUE made personal loans totalling $4,230,000 at 10% interest, convertible into GBGD shares. [The conversion for $3,210,367 of these loans was set at a floor of $0.43 per share.] These loans were from Mr. Ian Hague's "personal cash", not cash from the managed funds of FireBird Management.

Below are the details of the Director Loans made by IAN HAGUE:

February 7, 2008. . . . . . . . . . . $ 260,000
March 10, 2008. . . . . . . . . . . . $ 280,000
April 14, 2008. . . . . . . . . . . . . $ 300,000
May 12, 2008. . . . . . . . . . . . . $1,500,000
July 7, 2008. . . . . . . . . . . . . . . $ 800,000
------------------------------------------------
Total $3,140,000
Total+accrued intrest to July 31 $3,210,367.12


The loans above were consolidated in to one loan totalling $3,210,367.12, as of July 31, 2008, as further outlined in the Chilean Mining Asset Sale Agreement. (See GBGD Letter to Ian Hague and Don Laguardia related to Chilean Mining Assets Sale of July 31, 2008 - link to SEC Filing).

The Acquisition of the Chilean Assets was terminated on September 16, 2008 (see 8-K - Termination of a Material Definitive Agreement - link to SEC filing) and Mr. Ian Hague's advances of $3,210,367 were automatically converted to loans, carrying 10% annual interest with an option to convert the entire loan to GBGD stock at no less than $0.43. The loans made by Mr. Don Laguardia's, totalling $150,000, were never returned by GBGD and its principle executive, Mr. Van Krikorian, claiming it was forfeited.

On September 23, 2008 Mr.Ian Hague made an additional loan to bring the new consolidated loan to $3,500,000 as outlined in the RE: Loan to Global Gold Corporation and Royalty Letter (link to SEC filing)



September 23, 2008. . . . . . . . . . $ 289,632.88
---------------------------------------------------
Total $3,500,000



The strangest thing about this new loan of $289,632.88 is that Mr. Van Krikorian and Mr. Ian Hague negotiated new terms for the advances, instead of 10% interest per annum and a conversion to GBGD shares at a floor price of $0.43, the loan was changed to 10% interest per annum, no conversion and 1.75% Net Smelter Royalty (NSR) on gold produced from GBGD's interest in the Chilean Assets.

Mr. Ian Hague went from attempting to acquire GBGD's Chilean Assets for $5,000,000 and paying Global Gold a 2.5% NSR, to becoming a lender to GBGD and receiving a 1.75% NSR.

Assuming that there are 5,000,0000 ounces of gold on the property, as GBGD believes, and assuming the price for gold at $800 oz, Mr. Ian Hague can now potentially receive more than $35,000,000 in cash flow from this 1.75% NSR over the life of the mine. That's a very rich return for just making an additional $289,632.88 loan, for anyone, but especially for an "independent director" of GBGD.

If this is not the definition of self-dealing, I do not know what is. The rules for Private Companies are a little different, but public companies and their directors have a higher set of standards to meet when taking into consideration and accepting such deals. This deal negotiated between GBGD CEO, Mr. Van Krikorian, and the "independent" director, Mr. Ian Hague, to give away a 1.75% NSR of their Chilean Assets, for receiving an additional loan of $289,632,88, smacks of self-dealing.


Mr. Ian Hague continued to act as the personal banker for Global Gold while continuing to be elected "independent director". Including the new consolidated loan of September 23, 2008 of $3,500,000, Mr. Ian Hague made additional director loans to GBGD for a grand total of $4,230,000 of loans from his personal account.


September 23,2008 . . . . . . . . . . $3,500,000
May 13, 2009. . . . . . . . . . . . . . . $ 500,000
September 14, 2009. . . . . . . . . . $ 50,000
October 29, 2009. . . . . . . . . . . . $ 60,000
November 12, 2009 . . . . . . . . . . $ 10,000
December 28, 2009 . . . . . . . . . . $ 110,000
------------------------------------------------
Total Loans $4,230,000

TOTAL TO OCT. 25, 2010 + INTEREST . . $5,052,262


On October 25, 2010 Mr. Ian Hague converted his loans plus accrued interest, totalling $5,052,262 to shares of GBGD at a shocking conversion price of $0.15 per share (see 8-K Sec filing of October 19, 2010), when his own FireBird managed funds purchased shares at an average price of $0.398

Mr. Ian Hague's loan of $3,210,367.12 related to the Chilean Agreement of July 31, 2008, had an original conversion price of $0.43 per share. This should have provided Mr. Hague with 7,465,970 shares of GBGD and an additional 5,481,747 on the balance of the loans and accrued interest, for total conversion of 12,947,717 GBGD shares.

Instead Mr. Ian Hague received an additional 20,734,031 GBGD shares for total consideration of 33,681,748 GBGD shares pocketing an extra shares valued at $3,110,105.


THIS EQUATES TO A 160% INCREASE IN THE NUMBER OF SHARES BEING ISSUED TO MR. IAN HAGUE. SPECIFICALLY, 20,734,031 EXTRA SHARES WERE ISSUED TO MR. IAN HAGUE, HIGHLIGHTING HIS DUBIOUS GBGD SHAREHOLDING AND GENEROUS NSR OF 1.75% FOR MAKING AN ADDITIONAL $289,632.88 LOAN ON SEPTEMBER 23, 2008, ALL WHICH CAUSED ENTIRELY AVOIDABLE YET DEVASTATING DILUTION OF 48% (FROM 40.98% to 21.29%) TO THE GBGD SHAREHOLDING BENEFICIALLY OWNED BY FIREBIRD LIMITED PARTNERS.

Furthermore, Between Mr. Ian Hague's personal shareholdings and the shareholdings of the FireBird Funds, Mr. Ian Hague, GBGD's independent director, controlled approximately 64% of the outstanding shares of GBGD.

Mr. Ian Hague became a controlling shareholder and wielded considerable power in GBGD's affairs. Mr. Ian Hague was now "too close to management" (ie Mr. Van Krikorian) to be considered "independent" even though he still sits as an independent director on the Board of Global Gold Corp..