Reverse Stock Split

One way of getting around a heavily diluted float and the lack of enthusiasm for a stock because of the astronimical size of the float is the reverse split. Only the worst companies resort to this kind of tactic, since its totally antithetical to issuing shares in the first place.

Still, I'm not so sure that GBN.V is going to avoid this fate, only because there is an immense developmental deficit in front of the company that built up over the years, simply because any project in the La Ronge had been shut down for no better reason than the previous developers had no hope of raising cash for further development.

I note that Netolitzky himself had mentioned the option during an investor meeting some time ago, enraging the participants. IF they resort to such an ill-advised move, then the likelihood of reverse splitting the shares either 5:1 or 7:1 are possible given that they are muliples of 35 (~350m. shares - 10:1 will seem too much, 3:1 will seem too little.) This may be the reason for the present lack of participation in the stock. The company fails to mention any sort of reverse stock split in the risks of its financial reports. The small number of large participants in the stock might mean the company feels it can do whatever it wants.

I think the company is being given opportunity to cover every last part of their development plan long into the future without having to reverse split the shares, but even so, the shareholder need not feel totally put out. You have to prepare, and gauge your requirement based on your ownership of the percentage of the float. If a reverse split occurs, then the company cannot do enough to appease the shareholders by paying a very robust dividend because absolutely nobody will care to invest.

The best thing to do is stay informed. A very good article on the reverse stock split is available on wikipedia.org:

http://en.wikipedia.org/wiki/Reverse_stock_split

Two things this might achieve:

1. A small comparative float

2. A move the the TSX

Failure to achieve their aims might mean that development will be brutally stunted and the company will fail. So the easiest path for them to choose would be to pay a robust dividend (which they can easily manage out of free cash flow) and totally avoid further dilution, and set aside massive development plans in favour of step by step additions.