Debenture Financing

GBN.V engaged in a debenture financing in 2009, which was subsequently cancelled, because of on-going discussions with another investment bank about financing the La Ronge Gold Project.

The company claims its been overwhelmed with costs, but I would assert that the company is overwhelmed with free cash flow, only to amortize any earnings against a pre-paid loan.

The PEA was the basis for lending, and it states that $26m. was required for startup. Pg. 151 of the PEA is proof of that. The company raised a total of ~$46m. in fiscal 2011, almost all through dilution.

The company earned ~$67m. in fiscal 2012, far above any rational appraisal of costs. Yet, they preposterously claim that the amount is entirely spoken for.

Over two fiscal years, some ~$110m. was literally THROWN at the project, far in excess of the orignal CAPEX.

Quote:

"An estimated $26 million of the net proceeds of the offering (assuming the maximum amount) will be used for the pre-production capital to develop the La Ronge Gold Project, as described in the company’s Pre-Feasibility Study (see news release of January 26, 2009), with the balance for working capital purposes. This financing structure will allow Golden Band to secure project capital requirements by committing just a small percentage of the gold that will be mined in the first three years of production from the La Ronge Gold Project. This gold-based financing will also eliminate the significant dilution of the company's shares. The Pre-Feasibility Study also found that with gold priced at US$825 for years one and two and US$775 in years three and four, the project would have a 2-year payback. The Company’s objective is annual production of at least 75,000 ounces of gold over a ten-year project life."

source:

http://www.goldenbandresources.com/html/news/press_releases/index.cfm?ReportID=203167

This amount was intented to pay for both Lloyd and Komis. Komis most certainly would not have cost a total of ~$16m to set into production, as the company preposterously suggests.

Or a leak on the berm of the above-ground tailings facility would not have incurred costs of ~$8m. as they claim.

The gold price has been DOUBLE those forecast prices in the Pre-Feasibility Study. And yet, $26m. was enough for a FOUR YEAR PROJECT and would have included both LLOYD and KOMIS.

They might have been working on Bingo West and Northwest in the meanwhile, between 2010 and 2012, but prior to 2011, they would have been working on something else.

Bing Maps gives us direct evidence that work has been on-going prior to 2011, only not west of Bingo, but NORTH of the Tailings Management Facility.(also due west of the road) There is no evidence of a SGH survey done, west of Bingo, only trails that are commensurate with drill results in the news releases.

But NORTH of the TMF, you have a substantial amount of work that has obviously concluded, and prior to production startup:

http://binged.it/WmIW8h

Resolution is in the 100m range, but zooming to 50m. resolution should give you drill pad locations, line-cutting, tracks over a large area.

The historical record does not mention any work pertaining to the NORTH of Mallard Lake (TMF) Only to the SOUTH.

http://www.er.gov.sk.ca/dbsearch/MinDepositQuery/default.aspx?ID=0901

At the time, late 2010, the company was adamant that construction was on schedule and on budget. But in the meantime, a black hole developed to literally suck excess cash into it, which amounts to almost 4X the original startup costs.

-F6