This is playing out more or less the way i figured. The company needed money to continue to develop the deep deposits at 007, the Hinge plus upgrade the A shaft to handle the additional ore volume.

Development Outlook for 2013

The objective of the development program, from 2013 onwards, is to increase mine production to match the current mill capacity. Development will take place within the Property in four main areas, on 26 Level, 16 Level, A-Shaft of the Rice Lake mine and within other active mining areas of the 007, Hinge, Cohiba and L13 deposits. (refer to Figures 1&2 on projected timelines)

--  On 26 Level of the Rice Lake mine, the Company is driving a 150 metre    drift, to begin definition drilling of the 007 deposit, and a 300 metre    access drift to allow mining of the 710 deposit. Mining in this region    is targeted to begin in early 2014.     --  On 16 Level of the Rice lake mine, the Company is constructing a new A-    Shaft ore handling system and 1,200 metres of tracked haulage drifts to    access the Hinge district from 720 metres below surface. Development    work will continue in 2014 to access the 007 deposit. Mining is targeted    to begin in early 2014 in the Hinge district, with operations commencing    in the 007 deposit later in the year.     --  A-Shaft is being reconfigured with new ropes, guides, drum, and skips in    anticipation of increased production from the 16 and 26 levels. Once    complete, A-Shaft is expected to have up to 2,500 tpd capacity from 26    Level and 3,000 tpd capacity from 16 Level.     --  Within the active mining regions, the Company is planning 6,800 metres    of development to provide access for mining operations, drill stations,    services, and ventilation.

Once the development is complete, the operations team will have access to multiple faces, which will lead to significantly higher production rates and lower cash costs per ounce.

There are two big banks, Scotia and CIBC, which have enough confidence in the company to put up $50 million now on a bought deal basis (as opposed to best efforts). Yes, they get a heck of a deal with an 8% coupon for 5 years and a 50 cent conversion. This deb, if fully subscribed and converted will add 155 million shares to the float for a total of approximately 460 million shares O/S. Add in a likely flow through placement to pay for surface exploration, say another $10 million at 50 cents and you have another 20 million shares +/-480 million.

Then next year, 2014, they will likely require a similar amount of financing, assuming the POG maintains a level where the project remains viable.

This is the way I see it shaping up, going forward.

There will continue to be pressure on the SP until the debenture closes, scheduled for March 6, as funds/investors sell free-trading stock to buy the deb. All objectives and timelines set by the company will be missed on the low side but there will be slow (likely excruciatingly) progress to increase production through the afore-mentioned development. It will be a slow grind for the SP.

Let's say the share price at the end of 2013 is 75 cents, very optimistic IMO. Most of the debs would be converted at the holders discretion (PS: I don't see a forced conversion clause in the deb NR). If the float gets up to say 500 million shares the company may consider a share consolidation prior to issuing the 2014 financing, say 1:5, knocking the float back to about 100 million shares and getting the SP up to the $3 level. Then for 2014, they have a choice, an equity financing or another debt instrument.

I believe the way to play this for a hold is through the deb, which I have chosen to do. 8% isn't a bad return to wait and see. I apparently have been confirmed for an allocation. There will be trading opportunities along the way, as with all stocks, so if a person wants to do that, well, buy low sell high and don't be greedy. I expect selling pressure to continue until the deb closing and a share consolidation within 1-3 years. I don't expect a takeover, if at all, until after development of the deep deposits and shaft upgrade is complete. If they aren't taken out, I see the company expanding its mill capacity but that won't be until maybe 2016, where they will need another significant financing.

This is all dependant, of course on the POG remaining sufficiently high and costs low enough to maintain viability.

AIMO and GLTA