via Bloomberg

The one source of available information on the web which was second to none was the Bloomberg website. It provided a complete breakdown of company finances according to IFRS, and would provide it on the day quarterly reports came out. You were able to work out just where the money had gone.

But now, with the latest annual report, very few financial details are actually available any longer. But that still doesn't change things.

If you add together the payout to Sprott and the pre-paid loan to Waterton, you get approx. ~10¢ per share EBITDA.

The stock is basically worth a dollar @10P/E, plus the asset value.

You would assume no depreciation in the mine because they would have obviously drilled off a sizeable chunk of ore to keep going, which still goes unreported. They also paid no taxes because they expressed a loss. Thus it makes things very easy to work out.

Its not for nothing that the company contrived to express a loss, much as it had in fiscal 2011. In fact, actual numbers are the same if you campare 2011/2012. They may as well just not have mined any gold. Low grade results out of the Riddle Till were not necessarily unforseen, either. They gave ZERO guidance on that score.

Two things make me laugh about all of this, that Rodney Orr stood up in front of people and lied, lied, lied, like their was no tomorrow, giving credence to the addage that a gold mine is a hole in the ground with a liar up at the top. The auditors must have hastily signed off on annual financials, not wanting to disturb their coffee. I was wondering just how Netolitzky would get it all past them. (things would have to have been done absolutely correctly) If I were the banks, I would offer free, automatic DRS to all retail investors holding gold mining stocks, should a systemic financial crisis unfold.

Click on the annual income statement. See how N/A comes up in all of the financial statistics.

http://www.bloomberg.com/quote/GBN:CN/income-statement

Waterton should be well advised to back into the stock with the $20m. that GBN.V gave them, which would probably buy ~35m. shares. (based on the average price of outstanding warrants.) They can offer to buy out the company (or offer to buy shares at the 300-day MA with the available cash) which would probably give them more shares than they really need, though they will probably fail to acquire all the outstanding shares. I think the Globe & Mail has it correct that you can buy a certain amount of gold mining companies' production based on ounces of gold produced divided by the outstanding shares.

A holding of that size would provide much greater returns if GBN.V eventually pays dividends than just arranging for an interest rate kickback on pre-paid loans. A no-distributions policy in the agreement dated August 10, 2012 on SEDAR looks like gross incompetence, imo.

Sprott very likely declined to accept a deal of this nature. Waterton is probably just realizing that they were made.

If I were a hedge fund, I would acquire the company sight unseen without much due dilligence, or getting drawn into a confidentiality or standstill, and then take it private only to IPO later. Or, if you don't manage to buy out the company, once GBN.V finally lays their last card on the table over just exactly what they've been doing in the Dickens Lake prospect all these years, you can elect to sell at your convenience.

Without a dividend strategy, this company is at best merely a land-flip, where a work-to-rule management has lost any and all of its advantages by witholding information and painting itself into a corner, and the sooner they realize this, the sooner they will see that limiting production numbers is an absolutely unbelievably bone-headed tactic.

-F6