Global Gold Corporation (OTCBB: GBGD) is pleased to announce that
with proceeds from a $2.5 million loan from ABB Bank announced
March 30, 2010, it has expanded mining and production operations at
its Toukhmanuk property in Armenia and is implementing the mining
plan to extract 300,000 tonnes of ore per year with anticipated
production exceeding 15,000 ounces of gold per year Average
operating cost of production continues to be projected at under
$400 an ounce. The first shipment of 60 tonnes of gold/silver
concentrate containing approximately 112 ounces of gold was
delivered and invoiced October 14, 2010 and two shipments per month
in increasing quantities are anticipated.
This release also clarifies misleading press releases regarding
Global's joint venture with Caldera Resources, Inc concerning the
Marjan property in Armenia, approved by the TSX-V and announced on
June 17, 2010. On October 7, 2010, Global sent and has not
withdrawn notice of termination of the joint venture based on
Caldera's non-performance and other reasons. One government issued
90 day legal notice of Marjan license termination was issued on
September 28, 2010 and a second notice, received but undisclosed by
Caldera, was issued on October 12, 2010. Both government issued
notices are official records and available to the public on line at
the issuing Ministry. Global expects to resolve these situations
amicably, preserve the licenses, and proceed with the approved
mining plans at Marjan.
Toukhmanuk Production and Sales Recommence Pursuant to Expansion
Plan. Since July 2010, mining production has steadily increased at
Toukhmanuk to a current level of 700 tonnes per day, targeting
1,000 tonnes per day. After stripping, 20,000 tonnes of ore has
been mined at approximately 2 g/t Au grade; that has been added to
the 30,000 tonnes of ore previously stockpiled at the plant and is
ready to be processed. The existing plant with a capacity of
200,000 tonnes per year has been further upgraded and is now
operational with three shifts working per day. Two shifts per day
are working at the mine. New mills and additional major plant
upgrades are expected to be installed and operational by January,
to increase plant production and efficiencies. Mining will continue
during winter months to make sure the plant has enough feed to
operate continuously. Pursuant to the offtake agreement, the gold
and silver concentrate produced at the Toukhmanuk facility is
purchased at 80% of LBMA (London market) closing price, less
certain treatment and refining charges.
On October 27, 2009, Global Gold announced the first stage of
government reserve approval for C1 and C2 categories of 35.614
tonnes (approximately 1,145,000 ounces) of gold and 107 tonnes
(approximately 3,440,000 ounces) of silver at Toukhmanuk. The
approvals followed a significant discovery at the Toukhmanuk
Central Area (2.2 sq km out of the total 53.76 sq km total
Toukhmanuk license area) announced in October 2008 and a review of
the company's technical submission filed in March 2009. In its
approval, the Republic of Armenia's State Natural Resources Agency
(the "Agency") added that the "approved reserves entirely
correspond to the requirements for Measured and Indicated Resources
under International Standards." Following up on the issuance of the
certificate approving a first stage gold reserve of 1.145 million
ounces, the Agency delivered its full decision with backup
calculations on November 13, 2009 confirming an additional gold
resource in the inferred category of 35 tonnes (approximately
1,125,276 ounces), bringing the total in measured, indicated and
inferred categories to approximately 2.27 million ounces. A copy of
the official approval and a partial unofficial translation are
available on the company's website www.globalgoldcorp.com. Before
relying on any reserve or resource reporting, however, investors
should read the "Cautionary Note" and "Forward-Looking Statements"
terms included at the end of the release.
Global Gold's exploration program focuses on expanding the
Toukhmanuk project and on upgrading the gold resources to SEC Guide
7 compliant proven and probable reserve standards. The company's
production program is currently completing the expansion to 15,000
ounces per year and followed by an estimated industrial production
level of 133,000 ounces per year. As reported previously, Global
must obtain additional financing to effectuate these plans. The
reserve and resource estimates were concluded at a cutoff grade of
0.8 grams per tonne.
Caldera Resources Joint Venture Termination and Status.
On June 17, 2010, Global and Caldera Resources announced TSX-V
approval of their March 24, 2010 joint venture agreement to explore
and bring the Marjan property into commercial production. The
Marjan mining property is located in Southwestern Armenia, along
the Nakichevan border in the Syunik province. As previously
reported, the property is held with a twenty-five year "special
mining license," effective April 22, 2008 and expiring April 22,
2033, which expanded the prior license term and substantially
increased the license area. The license required payments of annual
governmental fees and the performance of work at the property as
submitted and approved in the mining plan which includes mining of
150,000 tonnes of mineralized rock between April 22, 2008 and April
21, 2011, as well as exploration work to have additional reserves
approved under Armenian Law in order to maintain the licenses in
good standing. Caldera has advised Global as well as governmental
authorities that it would not be complying with the work
requirements which prompted 90 day termination notices from the
government and the October 7, 2010 joint venture termination notice
from Global. Contrary to misleading reports, these notices do not
trigger mere administrative proceedings nor have they been
withdrawn.
The joint venture agreement provided that Caldera would be
solely responsible for license compliance and conducting the
approved mining plan, and that "[i]n the event that Caldera does
not, or is otherwise unable to, pursue this project and pay to
Global Gold the amounts provided for hereunder, Caldera's rights to
the Property and the shares of Marjan-Caldera Mining LLC shall be
forfeited and replaced by a Net Smelter Royalty (the "NSR")."
Caldera has not met the threshold to earn any NSR under the
agreement, and its notice of license non-compliance as well as its
failure to pay resulted in an automatic termination of its rights
by operation of the agreement. The agreement provided that Caldera
would deliver 500,000 of its shares to Global, "subject to final
approvals of this agreement by the TSX Venture Exchange." The TSX
Venture Exchange approval was issued in June and Caldera failed to
deliver the shares.
In addition, Global's October 7, 2010 termination notice noted
Caldera's illegal behavior in registering charter changes harmful
to and without the consent of Global, failure to operate with an
agreed budget, illegal use of power of attorney (since withdrawn),
refusal to turn over joint venture documents, material
misrepresentations on technical and other matters, and more. Global
has also provided notice that Caldera should stop using misleading
pictures of Global work and properties unrelated to Marjan on
Caldera's website, and Caldera has refused to do so. Global is
committed to preserving the license and hopes to resolve any
related problems amicably, but reports that the joint venture has
been confirmed and not terminated were issued without Global's
approval and Global assumes no responsibility for them or any
information disseminated without Global's consent.
Cautionary Note to U.S. Investors -- All mineral reserves have
been estimated and disclosed in accordance with the definition
standards on mineral resources and mineral reserves of the Republic
of Armenia State Natural Resources Agency as provided by the
Republic of Armenia's Regulation for Applying Reserves
Classification for Gold Deposits. U.S. reporting requirements for
disclosure of mineral properties are governed by the United States
Securities and Exchange Commission "SEC" Industry Guide 7.
Armenian, International, and Guide 7 standards may not be
consistent. The United States Securities and Exchange Commission
limits disclosure for U.S. reporting purposes to mineral deposits
that a company can economically and legally extract or produce. We
use terms such as "reserves," "resources," "geologic resources,"
"proven," "probable," "measured," "indicated," or "inferred," which
may not be consistent with the reserve definitions established by
the SEC. U.S. investors are urged to consider closely the
disclosure in our Form 10-K. You can review and obtain copies of
these filings from our website or at www.sec.gov/edgar.shtml.
Investors are cautioned not to assume that any part or all of
mineral resources will ever be confirmed or converted to Guide 7
compliant "reserves." The information in this release reports on
the legal document issued by the Armenian Agency. Forward-looking
Statements -- To the extent that statements in this press release
are not strictly historical, including statements as to revenue
projections, business strategy, outlook, objectives, future
milestones, plans, intentions, goals, future financial conditions,
future collaboration agreements, the success of the Company's
development, events conditioned on stockholder or other approval,
or otherwise as to future events, such statements are
forward-looking, and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
The forward-looking statements contained in this release are
subject to certain risks and uncertainties that could cause actual
results to differ materially from the statements made. Former
Soviet country estimations are presented for historical reporting
and to provide a basis for assessing Global Gold's choices for its
business activities and not to be understood as indicating the
existence of reserves or resources. Global Gold Corporation
www.globalgoldcorp.com is an international gold mining,
development, and exploration company with mining properties in
Armenia and Chile. The Company is committed to building shareholder
value and maintaining social and environmental
responsibilities.
Contact: Drury J. Gallagher Global Gold Corporation 45
East Putnam Ave. Greenwich, CT 06830 (203) 422 2300 Email Contact
www.globalgoldcorp.com
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