CTO - Citigold Corporation

yeh i was thinking the same thing

10million oz and 100mil market cap doesnt add up....

wat they need is experienced management with the knowledge and the cash to fast-track production, looks to be prime for a take-over

what a classic charters stock this has been over the past 2 weeks,, bugger the fundementals, iam out now and will get back at some stage. well done to all who profitted over the last week or so. regards beach

From what I understand they have been setting deadlines for start of gold pour since 2000 and have obviously never met them 6 years is very slack! Something is up, there is no way a company with that much gold wouldn't get more attention + funding + JV/TAKE OVER etc,

I think that they are yet to prove the gold is out there, ie Inferred is the weakest category around!

All systems go
By TONY RAGGATT
21mar06

LISTED company Citigold Corporation is adamant it will begin producing gold from the historic mining centre of Charters Towers this year after a series of false starts.

The company, formerly called Charters Towers Gold Mines Ltd, produced 38,000 ounces in trial mining operations up to 2000 after listing in 1993 and developing a 1.6km-long underground tunnel.
It aspires to being Queensland's largest gold producer mining the original ore bodies that gave Charters Towers international renown in the late 1800s and early 1900s.

However, since 2000 dates listed for a start to production at one of its four proposed mines, the Warrior mine, have come and gone.

Citigold chief operating officer Chris Towsey said yesterday the only thing holding back a start at Warrior had been funding.

However, the funding was now in place, they had sourced most of the equipment needed and they were now acquiring extra labour.

"The mine is proceeding and we have the ore," Mr Towsey said.

"The funding is in place and that's the only thing that was holding us up before."

About $3 million had been spent developing a 477m-long tunnel incline for the Warrior and about another $2 million would be spent extending it a further 470 metres.

The mine is planned to produce 40,000 oz a year.

"The objective is to pay a dividend as soon as financially prudent to do so," Mr Towsey said.

"We would expect a dividend to be payable 12 to 18 months after the commencement of gold production."

The company announced last week it had raised $2.5 million through a private placement and with a share purchase plan, other placements, investment and debt reduction had strengthened its cash position.

It said joint venture negotiations to secure another $46 million to bring a second mine into production were well advanced.

Charters Towers Mayor Cr Brian Beveridge said Citigold was spending about $1 million in the city and the project was needed to provide as many as 400 jobs when other mines were exhausted.

"I would dearly love to see Citigold pick up the slack," Cr Beveridge said.

"All the reports indicate they are capable of doing that and I'd like to see that sooner rather than later."

YOUNG_TRADER said:

The mine is planned to produce 40,000 oz a year.

Click to expand...

Dont u think they could manage better than this considering the size of their resource ?

But i guess they could always ramp up production in later years...

I guess its a start

Niz, from what I gather, the resource is made up by a few different deposits, intially they are accessing the 'warrior' deposit, which would only allow for 40k oz's p.a.


But have spoken to some industry chaps today who reckon quote "they are full of ****"
If they had proven that there was that much gold in them hills then prospectors like NCM, LHG, Barrick etc would have gobled them up @ current mkt caps,

But then no-one believed the FMG chaps when they said there's Iron Ore yonder, tonnes and tonnes of it!

Be interesting to see how they develop, after 5yrs worth of delays I am sceptical and shall watch for the time being

Citigold

Anyone looking at cto? This queensland gold miner soon to come into production, haven't bought yet, but up lately on heavy volume. porkpie

There's certainly a lot more interest in the volume side of things now than there's ever been before.
Once it broke the shackles of the last SPP, and they announced funding to speed up production, new buyers jumped on board.
I expected a quick retracement to 22-25c but it seems to be holding its own around 30c for now.

Hopefully things can start to progress more quickly now and they get to their target soon and start producing.
Their gold production plan spans 30 years so this is just the start.
(Well it actually started back in 1969.)

Quotes from the website:

"The modern Charters Towers story began in 1969. The gold price was US$40/oz yet the project founder, James 'Jim' Lynch, believed the price would rise. He felt that with modern methods and sufficient capital, Charters Towers had the potential to yield as much gold again as it had in the past."


Interesting history about Charters Towers once being Australia's richest gold field...


"The Charters Towers gold field was Australia's richest major field with a total of 6.6 million ounces (over 200 tonnes) recovered over 45 years from 6.1 million tonnes of ore, at an average grade of 34g/t (1.1ozs). The grade was almost double that of Victorian mines and almost 75 per cent higher than grades of Western Australian (Kalgoorlie) gold fields of that time."

"Literally 100s of shafts were sunk during the hey-day of the field and the ore raised was processed through many large Treatment Batteries. Throughout the first 40 years over 130 individual mines produced an historic 200 tonnes of gold – virtually by pick and shovel. As the miners did not have the technology to ventilate their shafts, the mines seldom reached a vertical depth of more than 700 metres. Rather than suffocate, the workmen ceased operations – the gold never ran out! And although production came to a halt in 1917, to this day the Charters Towers goldfield remains Australia’s fifth-largest gold producer."

"This five square kilometre maze of shallow mines (controlled by the company today) produced the majority of the massive 200 tonnes of gold mined between 1872 and 1917. Only a few mines reached 800 metres in depth. South Africa, the world's largest producer of gold, mines the flat-dipping veins like those at Charters Towers to 3,000 metres and deeper."

They own all the tenements 100% and have over 200 sqkm of granted exploration tenure.

CTO's price has help up pretty well throughout this correction.
I really like the look of the chart right now...
Could be good times ahead if POG holds or starts moving again.

I agree Riles.

Looks like a flag or penant happening there, and could be about to breakout. Stochastics oversold but turning. MACD turning bullish. Looks positive.

Right though, need POG to move up again. There lies the danger.

Has broken out today. Up 14% to 36.5 as I type.

A recent report about CTO remarked about a comparison with BDG. While the price of BDG was around 2.30 and CTO was around .19c it equated to a market cap difference of nine times more for BDG than CTO.
This is quite a disparity between two co's with a similar story and similar reserves, albeit BDG will start to produce twice as much gold pa as CTO.

Interesting to see today BDG up only around 1%, while the sector is up around 4%, and CTO up around 14%. Could this be a shift away from one to the other??????.
Still lowish volume so might just be a blip.

Hi there, I have shares in Oxiana and I am looking at buying into Citigold too, do you think they will go through the roof in August? Investing in 2 gold companies... is that wise?
David

Citigold are set to start producing later this year (Sept-Oct if all goes to plan).
Their cash costs are low around AU$250/oz and their reserves are large.
At the current price of gold, they represent very good value. If the price of gold continues to appreciate, in the runup to their first pour, I would expect a lot more interest in this co.

Will the price go through the roof? LOL I wish!
There's a chance that if the gold bull run continues, the local and international investors will pile on board junior miners like this who are producing low cost unhedged gold.

If the stars line up there could be some good short term gains with CTO.
But stay with them and there could be much better long term rewards.

As for holding 2 gold co's - why not? If you're bullish on gold you'll enjoy the ride. Beats holding Telstra.

Looks to have been rerated, slightly. What a great past few weeks after breakout.

I know that you are chatting about CTO, but I noticed your coment on GML back in May. I just bourght some GML shares, what do you think the future holds for this company?

David

CTO has held up very well above $0.50 since been rerated imo, in the past few weeks.

I don't hold this yet, but am finding it harder to not delve into the margin loan a bit more for this.

Background:

Mineral tenements held by Citigold cover an area of over 200 square kilometres in the heart of the rich Charters Towers goldfield. The project has over 50 prospective geological targets for underground and open-cut mining development. Geological evidence indicates that Citigold's project area has a resource potential of 15 million ounces of gold. Exploration and development aims to bring these areas up to mine status and gold production. The project plans to have several profitable concurrent mining operations feeding its already constructed centrally-located processing plant.

Management's clear focus is on developing profitable gold production. The project has a current resource of ten million ounces in accordance with the JORC code of reporting mineral resources. Mineral tenements have been granted for up to 20 years, giving long-term security of tenure to the company.

Gold Production Plan

Citigold has just launched its new Gold Production Plan. It outlines the strategy with which to take gold production to 250,000 ounces per year over a five-year production period and maintain this production level for a total of 30 years, to produce a total of 6.8 million ounces.

Citigolds then General Manager, Mining & Exploration, Mr Chris Towsey said, 'The plan shows how the company will produce 250,000 ounces of gold per annum after a five-year production build-up period. With operating costs estimated at a low US$115/oz, the project will be profitable from Year 1.

Warrior Gold Mine

The Warrior gold mine development is continuing and the decline is expected to reach the deposit in August. Gold production is scheduled at 40,000 ounces per year with a planned minimum ten year mine life. Further progress has been made at Warrior with the decline at 830 metres from the portal. The access decline will junction with the ore body at 960 metres.

The initial access decline is nearly 90% complete and is progressing in good mining conditions. The first ore will be mined from a horizontal drive in the ore body commencing approximately 110 metres below the surface. Ore will then be stockpiled and transported to the processing plants. Several levels will then be excavated in the ore body so that full rate ore extraction (stoping) can commence. Initial gold production will be from the stockpiled development ore followed by production stoping.

The overall Inferred Mineral Resource for Warrior deposit is 1.9 million tonnes @ 14 g/t Au containing 840,000 ounces of gold (rounded to 2 significant figures - see Table 8 on Page 59 of the Report on the Inferred Mineral Resources for Charters Towers Gold Project May 2005)

Cash costs

Current cash costs are estimated at $380 comming down to $250 with the development of the planned 4 mines.

CTO is completely unhedged.

I'm actually hoping for the price to come back a bit, then I'll be adding a bunch more. It's defying gravity at the moment....

Hi New Girl,

There's still a lot of 'inferred' resource.

I'm also a litlte confused about exactly where the total inferred resource comes from. It seems to be taken from across all the potential sites they have pegged as opposed to just the four sites they have id as potential mines.

I've no doubt they have the ounces there, it's just a matter of efficiency in extracting the stuff. If it's all over the shop then it'll add significantly to costs. Although, they are claiming $250 an oz cash costs which is pretty damn good for long term with gold going to $1000+ imo.

Do you have any more detail on this.

Hi Kennas

I have a few comments on Citigold for you.

1. Wise Owl has recommended it as one to rise this year.

2. The management recently appointed Professor Blood to the Board. He is an expert on Finance, which has been one of the problems causing funding delays in the past. Therefore, I think delays were largely due to funding problems. Management does not wish to be taken over.

3. Another reason for delays was the fact that many separate mining tenement leases had to be individually acquired over a long period of time to result in the current large area available for mining.

4. Gold looks set to rise beyond $1000 per ounce, partcularly if world oil price increases continue. This looks to be inevitable as it will take some time before alternative energy is available at commercial levels.

5. The mine has similarities to Bendigo Mining which is at $1.60 in terms of size and status asa a pre exisitng gold mine. I read this in Bulletin speculator.

6. I know an ex broker who has put all his money into this one.

7. The joint venture funding is with a company that is likely to be a customer of gold in the Middle East or India (largest market for gold).

Hope this helps with your healthy scepticisim. What do you think?