CTO - Citigold Corporation

[Mogul]

AGM today, will be interesting to see the outcome regarding what happens with the director's.

Very light trade this morning.

 

[The Dealer]

What did you think about the cheer leader letter that all shareholders received?
Basically a please hang in there for us. It has actual scared me a little that there will be no good news coming at anytime soon.

 

[So_Cynical]

What did you think about the cheer leader letter that all shareholders received?
Basically a please hang in there for us. It has actual scared me a little that there will be no good news coming at anytime soon.

I though the letter was pretty over the top...i went to the CTO website to see if i could find it there but couldn't. :dunno: perhaps there not keen to share with the general public.

Anyway here are a few classic quotes

Like all great undertakings we have had our ups and downs, but we have together conquered all and will now continue growing. We have been producing Gold for 2 years with gold output up 41% for the last 3 months, on the previous quarter to 2609 ounces. Our study's show that the mine has the potential to generate substantial free cash flow.

This is my favourite bit.

New mine site management is in place from October to drive growth. the desire for prudent management of shareholder funds is coupled with the aim to scale up current production operations to 85000 ounces in 2010 and further.

So there magically going from 2609 ounces in the last quarter to at least 21,000 ounces on average per quarter in 2010...a simple little what 800+% production turn around in 6 or 9 months.

Its laughable.

 

[beachbum]

Hi posters, I have not commented on this company before but I would never buy this stock. I worked in the nearby Pajingo mine for several years and the company directors have been talking up production since day dot. I think it was Charters Towers Gold before they renamed into Citigold. Word was not good then and things don't seem to have changed. Somehow they are able to get more investors to invest money when the cupboard looks bare. I notice the directors pull a nice salary from this company. Same two family members on payroll I notice. They still have not put any runs on the board and it's always next year we hope to produce "X" amount of ounces. If the mine is looking so good, how is it that it is taking so long to produce "X" ounces.
Good luck to all that hold. I could be totally wrong or just cynical.

 

[Sean K]

So there magically going from 2609 ounces in the last quarter to at least 21,000 ounces on average per quarter in 2010...a simple little what 800+% production turn around in 6 or 9 months.

Its laughable.

What they must be relying on is moving into mining a section or block known to contain plenty of contained metal. If they don't hit it for some reason, they'll look mighty silly.

It might behove this company to start underestimating their growth rate.

If they don't start hitting targets and bringing in economic numbers we may see them have to do a BDG and resort back to exploration drilling to understand the deposits a little better.

I wonder when they are going to hit that 50m ounce motherload down beyond 2000m?

 

[propunter]

I sure hope Mark Twain didn't have Citigold in mind when he said
"A gold mine is a hole in the ground with a liar standing next to it"

 

[The Dealer]

I was talking to an old timer a while back who told me that when the gold mine at Mt Morgan was paying off our nation debt, that when things slowed up, the operator would go and throw a couple of nuggets on the ground so the locals who found them would make a big deal about how you can find gold just laying around and then bingo there would be a massive injection of capital. Now we have the asx announcement board I think.

 

[riverred]

A mere 5,000 oz for the Dec'09 qtr gold production. So it looks like there'll be another capital raising coming up shortly to pay for the next qtr's expenses. And it also looks like the raising may be made at a further sp discount. My guess is that the price range falls between 10c - 12c.

Perhaps by now Mark Lynch has finally learned not the keep making unrealistic forward looking statements as these will only come back to haunt him.

There's nothing wrong with being a quiet achiever in the mean time.

 

[So_Cynical]

A mere 5,000 oz for the Dec'09 qtr gold production. So it looks like there'll be another capital raising coming up shortly to pay for the next qtr's expenses. And it also looks like the raising may be made at a further sp discount. My guess is that the price range falls between 10c - 12c.

Perhaps by now Mark Lynch has finally learned not the keep making unrealistic forward looking statements as these will only come back to haunt him.

5000 ounces is around 6 million bucks, so that would have to go pretty close to paying the bills for last quarter :dunno: also nice to see a little honesty in today's market update.

http://www.citigold.com/viewasxrelease.asp?Releasenumber=314

With the benefit of hindsight the previous aggressive production build up rate was premature.

Also refreshing to see a somewhat more realistic production target going forward.

the gold production target for calendar 2010 year has been revised to 50,000 ounces. These more modest targets are based on accumulated experience and the more detailed understanding of the gold distribution.

I wonder what they actually need to produce to get to break even.

 

[riverred]

My guesstimate on cash cost is also approx. $6M p.q. So, if the last two capital raising net revenue of $6.8M has been applied for meeting the Dec'09 qtr expenses, that leaves the 5K oz gold sale revenue to meet the next qtr's costs. Hopefully that would be enough to buy CTO time to increase its gold production to 12.5K oz p.q.

Of course, that's on the proviso that Mark Lynch focusses on other corporate matters than more talk and promises; none of which has done much good for each successive capital raising in terms of securing the best value for long term investors.

 

[bandicoot76]

what are peoples thoughts on CTO's response to their ASX 'slap on the wrist'?

HEY MARK, STOP PUSSYFOOTING AROUND AND POUR SOME DECENT VOLUMES OF BLOODY GOLD ALREADY!!! SHEESH!

 

[lianeisme]

OK I own CTO and I'm not happy Jan, I have no idea why the prices are falling, when there is so much talk about gold prices rising, does anyone have any ideas what's happening with this company at all.
I have looked on company announcements but can't find anything that would make the prices fall to the current level other than the fact they pulled out of Dubi. Could it be a target for takeover at these prices by bigger Gold mining companies? Any light shed on this would be most appreciated.

 

[Unnamed User]

OK I own CTO and I'm not happy Jan, I have no idea why the prices are falling, when there is so much talk about gold prices rising, does anyone have any ideas what's happening with this company at all.
I have looked on company announcements but can't find anything that would make the prices fall to the current level other than the fact they pulled out of Dubi. Could it be a target for takeover at these prices by bigger Gold mining companies? Any light shed on this would be most appreciated.

I haven't even looked at the announcements of this dog of a stock for years but i am a former holder.

My best guess would be that the market is sick and tired of the promises and outright lies told by the management and aren't buying their story any more.

Do your own research by all means but this stock is well known in the investment world as a stock that promises the world but doesn't deliver.

 

[oldblue]

The CTO shareprice has been in a long term downtrend ever since I started following them almost 3 years ago. In theory Charters Towers has the richest gold deposit in Aust but has a long history of being difficult to mine.
Any guess at a 2 year SP projection for CTO would be just that, IMO, a guess!

I would doubt that a lot has changed since my above post of about six months ago.

Not one for me although I must admit to keeping a weather eye open in case there's a change in the trend.

 

[Sean K]

My best guess would be that the market is sick and tired of the promises and outright lies told by the management and aren't buying their story any more.

Do your own research by all means but this stock is well known in the investment world as a stock that promises the world but doesn't deliver.

Management need to go I think.

Their response to the production guidance question in Dec is a joke.

1. The Company does not view the information contained in the announcement concerning the Variations to Expected Gold Production as material.

HUH?

5,000 down from 15,000 just a few weeks before. Really, ASIC should have thrown the book at them for that. Unacceptable.

This comment in the Dec update is even more laughable.

With the new growth focused management team in place, the Board met in Charters Towers recently to get a first hand opinion on what is achievable going forward.

WOW!!! The board got a 'first hand opinion' on what was achievable! Are they serious? How else do they get their information? From HotCopper by the sounds. And they actually met in Charters Towers!!! Whoohoo!! Sounds like it's the first time they've actually been there to me.

 

[Wysiwyg]

what are peoples thoughts on CTO's response to their ASX 'slap on the wrist'?

HEY MARK, STOP PUSSYFOOTING AROUND AND POUR SOME DECENT VOLUMES OF BLOODY GOLD ALREADY!!! SHEESH!

This looks like a strong down trending stock while gold is at over USD 1000 per ounce. Can't say the warning signs aren't in the stock price. One thing that may help technically is the 10 cent base in 2005. I learned from similar situations that placing trust in management is folly.

 

[Sean K]

CTO below 10c a share, EV of about $77m, with over 10m ounces in the ground at 11.7 g/t. Current EV to oz au $7.70 ish. Seven dollars seventy an ounce. Yes, below $10 an ounce. That is unbelievable. What a turkey.

 

[So_Cynical]

CTO below 10c a share, EV of about $77m, with over 10m ounces in the ground at 11.7 g/t. Current EV to oz au $7.70 ish. Seven dollars seventy an ounce. Yes, below $10 an ounce. That is unbelievable. What a turkey.

And there in the middle of yet another share purchase plan at the moment, issue price ... 12 cents per share. what a bunch of clowns the share price tanked the day of the SPP announcement.

 

[Sean K]

And there in the middle of yet another share purchase plan at the moment, issue price ... 12 cents per share. what a bunch of clowns the share price tanked the day of the SPP announcement.

I've said this before, but this will either go the way of a Bendigo and have to go back to exploration to understand the deposit better and mining method, or it could be the ultimate turnaround story. Hard to see takeover with so much doubt about the deposits, but maybe new management could turn it around?

 

[J.B.Nimble]

CTO below 10c a share, EV of about $77m, with over 10m ounces in the ground at 11.7 g/t. Current EV to oz au $7.70 ish. Seven dollars seventy an ounce. Yes, below $10 an ounce. That is unbelievable. What a turkey.

That 10m oz is of no value if it remains in the ground, and on that basis one can only conclude - woof, woof... Sorry to say that I once held this for a few months but managed a dignified exit