CGG - Citadel Resource Group

[Sean K]

Hey mate,

Well, minus the Au and Ag credits I get a IGV for JS of US$ 9.03B, with of course, CGG earning a 50% interest in the project.

Yep, fully diluted, MC of 385M'ish looks correct.

Potentially there is also a target potential of 2.5Moz Au from Shayban and other prospects, plus the Ni and PGE etc projects - which I haven't even factored in yet. Wise Owl use a base-case scenario of capex US$350M of which there will be a 50% split between debt and equity as well.

Earlier in this thread BSD mentioned a possible debt-funding option offerred by the Saudi Govt (up to 75%). Not 100% sure how CMCI and Vertex fit into the broad scheme of things in terms funding any development, but my understanding is that they are now major shareholders/investors (?) in CGG.

Comments welcome.

Cheers
jman

Thanks jman, Well, just on JS this is now looking like tremedous value on the recent results to be added into the JORC. Quite incredible actually.

The IGV and potential MC into production look conservative now.

 

[jman2007]

Absolutely amazing results from CGG just in.:

JABAL SAYID RETURNS OVER 300 METRES AT 2.7% CU

TREMENDOUS HIGH-GRADE COPPER INTERSECTION

Turning into a world class asset by the looks.

Thanks for the heads up mate,

Looks fantastic doesn't it?.. . Makes you wonder what the true potential could actually be when considering lode 4 is still open at depth. CGG believe lode 4 could be a high-grade stand-alone operation on its own, but the option to bring lodes 1 and 2 online at a later date would remain open.

Essentially there is no internal waste from lode 4 at all, and as for the down-plunge intersection of 27m @ 5% Cu in the tail?!!.. let's get a rig underground! Certainly putting forward a very strong case for a profitbale underground operation.

jman

 

[Sean K]

Why does the ASX only deliver 'please explains' to companies that have gone north immediately, compared to those that have gone south.

Idiots!!!!

Like,

Really stupidly idiotic!!!!

Do they have a brain?

I think not.

They are taxi drivers.

Actually,

ex taxi drivers...

Too stupid to put an indicator on.

WTF!

 

[Sean K]

Yes, and confirmed.



Our stock price has gone up because we have a great asset.

Now, please go away.


Golly,

When does this happen when an sp goes down?

Idiots

aaaaaagggghhhhhh

 

[jman2007]

Our stock price has gone up because we have a great asset.

Now, please go away.

Lol kennas....

Perhaps they thought of this on their break, (while sipping on their skinny latte's) as a good way to pass some time?...

Page two of the the CGG release clearly directs readers to refer to Table 2, which gives a clear breakdown of the J-S Resource in terms of JORC categories.

I can understand the ASX wanting to clamp down on companies releasing wild and speculative "target potential of X-Million tonnes at prospect XYZ" type releases...but this seems to me to be extremely pedantic.

Took another nibble at 33c yesterday... couldn't resist.

jman

 

[Sean K]

LOL,

I sold this yesterday.

Will wait to see if it can reclaim 30c before I get back in. Was a critical break down IMO.


DRILLING CONTINUES TO EXPAND THE SHAYBAN PROJECT

LATEST DRILLING INTERSECTS BROAD ZONES OF GOLD MINERALISATION AND ASSAYS CONFIRM SIGNIFICANT SILVER, ZINC, AND COPPER CREDITS

Highlights:

• Additional drilling intersects extensive zones of gold and silver mineralisation from surface, or near surface, over the entire strike length drilled (+550m).
• Assays confirm significant silver and base metal credits in the previously reported gold zones and highlight the polymetallic nature of the mineralisation.

 

[Sean K]

At least CGG will learn how to REALLY ramp their company now.

Former Oxiana boss to advise Citadel
July 31, 2008 - 12:28PM

Gold explorer Citadel Resource Group Ltd has appointed former Oxiana Ltd managing director Owen Hegarty to an adviser role to the company.

Mr Hegarty, who stepped down from the managing director role after the merger of Oxiana and zinc and lead producer Zinifex Ltd, will take up his post at Citadel on August 1.

He remains a non-executive director of the merged Oxiana and Zinifex - OZ Minerals Ltd - and a director of the Minerals Council of Australia.

Citadel's flagship project is the Jabal Sayid gold and base metal's joint venture in Saudi Arabia with local outfit CMCI.

 

[jman2007]

At least CGG will learn how to REALLY ramp their company now.

Former Oxiana boss to advise Citadel
July 31, 2008 - 12:28PM

Gold explorer Citadel Resource Group Ltd has appointed former Oxiana Ltd managing director Owen Hegarty to an adviser role to the company.

Mr Hegarty, who stepped down from the managing director role after the merger of Oxiana and zinc and lead producer Zinifex Ltd, will take up his post at Citadel on August 1.

He remains a non-executive director of the merged Oxiana and Zinifex - OZ Minerals Ltd - and a director of the Minerals Council of Australia.

Citadel's flagship project is the Jabal Sayid gold and base metal's joint venture in Saudi Arabia with local outfit CMCI.

Haha...

I reckon this topdog should be worth at least 5c to the sp if he's half as good as they reckon he is

jman

 

[Sean K]

CGG has come out with a couple of good anns recently and continues to make progress with JS and it's other deposits.

Has $25m in the bank to take it through the rough stuff and must be one of the better placed explorers/developers to make it through this little hic up and be a producer.

MC off 75% ish and may be a nice tasty bite for a major when the inevitable consolidation takes place, if the market as we know it still exists in the future.

7 Oct ann:

Citadel is moving the Jabal Sayid project forward:

o Finalising a feasibility study on the Jabal Sayid copper sulphide deposit.
o Total mineral resources at Jabal Sayid of 74Mt. Including 52 Mt at 1.6% Cu (Stockwork Cu) 4 Mt at 1.9% Cu & 1.3% Zn (Massive Sulphide Cu/Zn) and 18 Mt at 2.2% Zn & 0.4% Cu (Massive Sulphide Zn) (Table 1).
o Mineralisation at Jabal Sayid is contained in four Lodes. To date Citadel has concentrated on defining copper resources within Lodes 2 and 4.
o A revised resource estimate, this time including gold, will be prepared in Q4.
o Underground refurbishment and mining contractors Bynecut are mobilizing to site and Swick drilling are mobilizing equipment to complete the in-fill drilling program
o Citadel is well funded, with ~$25M on hand following a successful fundraising early this year.

The PMs are lookingpretty good here after the recent drilling results too, which may save them if Au/Ag turn when (if) currencies turn to dust.

2 Oct ann:

EXPLORATION STEPS OUT KNOWN MINERALISATION AT LODE 1 JABAL SAYID

Drillhole BRC-4011 intersects 77m at 3.0% Cu, inc 20m at 7.3% Cu, 1.2 g/t Au
• Exploration drilling designed to test the near surface oxide gold zone at Lode 1 encountered broad zones of both oxide gold and silver mineralisation.
• Other holes designed to locate near surface copper mineralisation at the northern end of Lode 1 intersected significant zones of high grade oxide and sulphide copper.
• All intercepts are located outside the current Mineral Resource envelope and the results continue to show the promise of Lode 1:
o 77m at 3.0% Cu, 0.44g/t Au and 18.0g/t Ag from 63m downhole, including 20m at 7.3% Cu, 1.2g/t Au, 43.8g/t Ag (BRC1048; copper as sulphides)
o 59m at 1.0% Cu from 79m downhole (BRC1049; copper as sulphides)
o 40m at 2.7% Cu from 9m downhole (BRC1038; new zone of oxide copper mineralisation.)
o 83m at 0.93g/t Au, 9.30g/t Ag from 12m downhole including 11m at 2.33g/t Au and 7.0g/t Ag (BRC1035);
o 34m at 1.72g/t Au, 4.7g/t Ag from 1m downhole including 23m at 2.21g/t Au, 5.5g/t Ag (BRC1036);
o 13m at 1.06% Cu and 3.6g/t Au from 88m downhole (BRC1043);

(not holding, waiting.....)

 

[jman2007]

CGG has come out with a couple of good anns recently and continues to make progress with JS and it's other deposits.

Has $25m in the bank to take it through the rough stuff and must be one of the better placed explorers/developers to make it through this little hic up and be a producer.

Been a while since I poked my nose into this thread

In hindsight kennas I probably should have shot through with a modest profit a few months ago when this was threatening to well and truly bust out. Got greedy though, ignored the technicals and now licking my wounds.

There has been a plethora of positve news streaming out from J-S this month, only forseeable problem is the persistent seller at 16c with 6.5M shares, otherwise we would probably see this levelling at 20c.

Major news for this month:

- Discovery of new oxide aone above Lode 1 Resource envelope containing substansial Cu, Au and Ag credits. A definite RC target, potential for Open Cut mining here while underground mining is ramped up. Vey exciting.

- Dewatering of decline complete, uderground contractors being mobilised to J-S to commence underground rehab in prep for drilling, presumably targeting the open depth potential underneath Lodes 2 and 4. 30,000,000L pumped out of the mine.

- Potential extensions to Lode 1 Resource envelope with discovery of high grade core (incl 8m at 12% Cu from 203m..wow!). Interesting.

At least 2 rigs currently drilling on the surface, targeting extensions and infilling zones in Lodes 2and 4. Looking forward to the revided resource figures this Quater, this time with Au. I think it's worth noting that CGG may be a slightly superior position than its peers wrt funding arrangements. They may be able to fund up to 75% of the J-S capex with debt financing available through the Saudi Banks, and are only required at this stage to front up with 12.5% of equity for the capex which is estimated at around $330M. That has to be good news for shareholders as I would think this limits the dilutionary effect from future cap raisings.

I had some issues with the CGG release on the 2nd of Oct, as there were some errors in the text, and the diagrams were poorly labelled, or in some cases not labelled correctly. I e-mailed Ines Scotland and recieved this reply within 24hrs. I think it was good reply, but reminding them that there are people out there capable of pulling apart their data reminds them that they need to maintain high quality at all times.

---------------------------------------------------------
(Quote)

"Dear XXXX

Thanks for your note you are correct this was an oversight. The 77m @ 3.0% Cu refers to hole BRC (our new prefix for RC holes) 1048. BDH4011 was an earlier Lode 4 diamond hole that intersected 223m at 1.1%Cu, 0.3 g/t Au from 153m, incl 48m at 2.25% Cu, 0.7 g/t Au from 153m that pushed the top of Lode 4 around 50m higher than the current resource.

It is not an adequate excuse however we rushed the release out a day earlier than we would usually as the discovery of a new copper sulphide zone north of Lode 1 is one the most significant events we have had in the past 18 months. The dips and azis for are BRC1046 dips -90 to 360; BRC1047 dips -60 to 270; BRC1048 dips -60 to 090 and hole 1038 does dip to the east BRC1038 dips -90 to 360. We will have a corrected figure in our annual report.

The new intersections in this announcement are all from RC holes, and as such have the BRC prefix. Holes 1048, 1038, 1035, 1036, 1043 and 1049 are all RC holes. The other holes in the diagram are all diamond holes.
Thanks for supporting your company and we’ll work to ensure there are no mistakes in future announcements."

Regards,

Ines Scotland

------------------------------------------------------------

Other than a slighly dodgy release (As Ines mentioned - will be corrected in the AR), been a great month for CGG project-wise.

jman

 

[jman2007]

Stunning and surprising gold drill results today from Jabal Shayban.

http://www.citadelrg.com.au/links/announcements/180308-shayban-exceptional-results.pdf

To quote:

"39m at 37.8 g/t Au from 5m to 44m, including 12m at 100.5 g/t (uncut)"

"The bonanza grade intersection reported in drillhole SH031RC represents part of a blanket of supergene enrichment within the oxide zone covering the Shayban hill. This is known to extend over at least 200m of strike, could be up to 100m wide, and remains open to the north along strike.".

Some fairly decent follow-up results from Shayban phase 2:

- 19m @ 10.66g/t from 81m incl 8m @ 23.72g/t
- 35m @ 6.14g/t from 39m incl 14m @ 11.97g/t

If I'm reading this release correctly, CGG have only received assay results for 3 of the 40 RC holes from phase 2, of which the 19m and 35m interecepts were from.... so there is another 37 holes worth of data to come!

I say get a diamond rig in there and see what lies underneath this oxide cap. Potential similarities to J-S here, Au mineralisation currently open along strike, down dip and down plunge. Would make a great starter project.

jman

 

[Sean K]

Wow, great intersections.

LATEST RC DRILLING RESULTS CONTINUE TO DELIVER BROAD HIGH-GRADE GOLD RESULTS

Highlights:

• New high-grade assay results include:
o 41m at 22.75 g/t gold from 0m - including 16m at 50.71 g/t.
o 28m at 14.17 g/t gold from 14m - including 5m at 65.71 g/t.
o 41m at 2.68 g/t gold from 21m.

• Continued intersection of high-grade primary and oxide gold by the current RC program further demonstrates Shayban’s potential to host a significant resource.
• Mineralisation has now been delineated over a strike length of 550m and is currently open along strike, down dip and down plunge.


Should be one of the few explorers/developers to rise out of the ashes, with cash and a couple of very good known resources.

All depends on how long the decline lasts I suppose.

 

[So_Cynical]

Yes Kennas...almost spectacular results in today's ann.

I couldn't help but notice the ann and haven't had time to
look right into them yet...u say they have some cash?

http://www.citadelrg.com.au/documents/NewHighGradeGold_JabalShaybanProject.pdf

 

[Sean K]

Latest results along strike from post 55 above.

Looks like a pretty nice shoot of gold they've got there.


MORE BONANZA-GRADE GOLD INTERSECTIONS FROM CITADEL’S SHAYBAN PROJECT, SAUDI ARABIA

LATEST RC DRILLING RESULTS CONTINUE TO EXTEND THE HIGH GRADE GOLD ZONES AT SHAYBAN

Highlights:

• The RC program continues to deliver high-grade primary and oxide gold that further upgrades the Shayban deposit.
• New high-grade gold results include:
o 32m at 15.22 g/t gold from 36m (SH067RC)
including 13m at 35.61 g/t gold from 42m
o 20m at 3.92 g/t gold from 59m (SH072RC)
o 16m at 2.59 g/t gold from 5m (SH069RC)
o 14m at 2.17 g/t gold from 30m (SH070RC)
• SH067RC extends the bonanza grade zone a further 20m to the east.
• Mineralisation at Shayban has been delineated over a strike length of 550m and is currently open along strike, down dip and down plunge.
Summary

 

[J.B.Nimble]

Yes Shayban looks pretty good, but they seem to have their priorities wrong. It is the much bigger Jabal Sayid copper gold project that is more advanced at this stage and they still talk of investing 250 to 280mill USD to be producing first copper by end of next year. I would feel much more positive if they switched the focus to Shayban which is a much less ambitious project, and with the good grades it is likely to produce a very attractive return. It seems a much better starter project and one that could produce the cash flow to fund Jabal Sayid at a more appropriate time

 

[Sean K]

Yes Shayban looks pretty good, but they seem to have their priorities wrong. It is the much bigger Jabal Sayid copper gold project that is more advanced at this stage and they still talk of investing 250 to 280mill USD to be producing first copper by end of next year. I would feel much more positive if they switched the focus to Shayban which is a much less ambitious project, and with the good grades it is likely to produce a very attractive return. It seems a much better starter project and one that could produce the cash flow to fund Jabal Sayid at a more appropriate time

Yeah good point JBN, I hadn't actually thought that myself before. Perhaps they've gone too far down the feasability path with Jabal that they are emotionally attached to it? LOL Would seem smarter to be opening up a near surface gold operation rather than an underground copper one at the moment...

 

[J.B.Nimble]

I guess Jabal Sayid made perfect sense up until October. It would be a pretty decent operation - grades look good - but best just to keep the BFS ticking along and not commit serious money until copper prices make some recovery. Regardless of how much blood sweat and tears has gone in to getting it this far, the right thing is to put it to one side and concentrate on something the market does want...

I see a parallel with PNA. They got the Phu Kham copper gold project up and running just in time for the crunch. How different it might have been if the very attractive but somewhat smaller Ban Houyxai gold silver project had received priority earlier. Right projects but only 20/20 hindsight could have told them wrong sequence...

 

[Sean K]

I guess Jabal Sayid made perfect sense up until October. It would be a pretty decent operation - grades look good - but best just to keep the BFS ticking along and not commit serious money until copper prices make some recovery. Regardless of how much blood sweat and tears has gone in to getting it this far, the right thing is to put it to one side and concentrate on something the market does want...

I see a parallel with PNA. They got the Phu Kham copper gold project up and running just in time for the crunch. How different it might have been if the very attractive but somewhat smaller Ban Houyxai gold silver project had received priority earlier. Right projects but only 20/20 hindsight could have told them wrong sequence...

I suppose if they do all the feasability and get set for development they'll be in prime position once the tide turns again. If it turns again. A few of the near term producers who have been seriously cruched will be good opportunities if the if turns into a when.

 

[jman2007]

Yes Shayban looks pretty good, but they seem to have their priorities wrong. It is the much bigger Jabal Sayid copper gold project that is more advanced at this stage and they still talk of investing 250 to 280mill USD to be producing first copper by end of next year. I would feel much more positive if they switched the focus to Shayban which is a much less ambitious project, and with the good grades it is likely to produce a very attractive return. It seems a much better starter project and one that could produce the cash flow to fund Jabal Sayid at a more appropriate time

I think CGG is coming from a slightly different tact. There is no doubt that there has been a massive shakeout in the Cu industry, and that many marginal projects & developments have bitten the dust. In reality Cu prices have just returned to pre-boom levels where those companies with high quality ore bodies were still making money anyway. I think CGG's point is that they could still high-grade JS profitably, not the preferred option because it obviously depletes your most valuable asset - your ore body, and once that's gone you can never get it back.

On the other hand, other companies in a slightly more enviable position are able to preserve their ore bodies and until happy days return once again, so they simply shut everythng down and get rid of their workforce - many examples of that recently. In CGG's case their best option is probably to get Shayban into the starting blocks as quickly as possible - they should be able to get 70-80K oz from the oxide zone at least, which would at least get some cashflow happening. But they probably still need to demonstrate to the market that J-S is a viable project, which we are all praying it is of course.

jman

 

[Sean K]

They must be reading this thread.


CITADEL’S EXPLORATION AND DEVELOPMENT EFFORTS CONTINUE TO DEVELOP THE GOLD ASSETS

CITADEL IS EXPLORING AND DEVELOPING TWO OF ITS MOST PROMISING GOLD PROJECTS – PRELIMINARY EXPLORATION HAS COMMENCED ON SEVERAL OTHERS.

Citadel’s current gold program:

• Resource drilling underway at Jabal Shayban
• Metallurgical testwork for Jabal Sayid Oxide Gold Cap in progress
• Scoping study to Heap Leach the oxide gold cap at Jabal Sayid approx 70% complete
• Study includes trucking higher grade ore for the first 1.5 years from Shayban to Jabal Sayid to increase grade and tonnes
• Production target for 2010 is 50,000 to 60,000 oz at Jabal Sayid with a heap leach located on the tailings storage facility
• Production increases in late 2011 with a CIL plant at Shayban to a target of 100,000 oz p.a.
• Exploration drilling at Lahuf with 2 rigs on site (located 40kms from Jabal Sayid)
• Exploration drilling at Bari planned for March 2009
• Continued exploration on the porphyry gold projects at Hail