via MineWeb

"It might have turned to equity instead of debt, but here, again, the cost of financing in terms of dilution turned it away. Mark Thiel, Golden Band vice president of finance and chief financial officer, described equity financing for its shareholders - himself included - as unpalatable. "It's a really tough sell," Thiel said. "There just is no appetite with shareholders for further dilution." In Golden Band's case - trading around C$0.19, with 285 million shares outstanding - the number of shares it would have to issue to raise C$20 million would be hefty, perhaps 100 million shares or more.

Given that, Thiel noted, debt markets were an attractive alternative. "The fact is debt markets are not so bad," Thiel said. And he added, "there is reasonably priced debt available for companies generating positive cash flow and earnings." The nice thing is about debt is that it doesn't cause unwieldy dilution. The downside, of course, is that at some point you have to pay it back."

http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=153338&sn=Detail

Note: GBN.V will probably wind up with revenue of ~$80m. in the first year of production after three profitable quarters and one break-even quarter. In order to provide a return to shareholders the company should be able to pay a dividend of 3 cents per share for the end of fiscal 2012, and quaterly 3 cents per share afterwards. This of course depends on the gold price and whether reality has set in with the company.

-F6