dubai loan, page-2

Auag
I don't recall any specifics about the $15M loan. It's a Convertible Note at 9% interest, so will add $1.35M to their outgoings each year for 2.5 years.

Some info on conditions was given in their ASX release for the 5 November General Meeting (not the AGM held on the 27th). There were no performance conditions given for the Convertible Note, but if CTO makes certain profits in 2009 (A$22M) and 2010 (A$44M)they can compel the Dubai Group to exercise the options:
======
Notes to the General Meeting of 5 November 2008

On 22 September 2008 the Company announced that it had entered into a capital raising deal (Agreement) with Dubai Ventures Group Limited (Dubai Ventures). Pursuant to the terms of the Agreement Dubai Ventures agreed to subscribe for the following issues of securities ;
(a) a placement of 50 million shares at A$ 0.20 per share to raise A$10 Million;
(b) the issue of 38,461,538 options to acquire Citigold shares exercisable at A$ 0.26 per share within 2.5 years and if the Company reaches certain profit levels during the terms of the Options the Company can require Dubai Ventures to exercise the Option. Exercise of these options will raise an additional A$10 Million; and
(c) the issue of a A$15 Million Convertible Security convertible into shares in the Company at A$ 0.26 per share within a 2.5 year term and carrying an interest rate of 9% p.a. This Loan will be secured to the value of $30 million against to be agreed project assets.

The Placement Shares and Round 1 Options were issued to Dubai Ventures on 24 September 2008 .

11. In the event that either:
__ the Company’s audited Financial Year 2009, Profit After Tax exceeds AUD$22 million excluding any extraordinary income; or
$_ the Company’s audited Financial Year 2010, Profit After Tax exceeds AUD$44 million excluding any extraordinary income;
the Company may at any time during the exercise period issue a notice in writing (Notice) to the Option holder requiring the Option holder to exercise all Options not otherwise exercised at that time and pay to the Company the exercise price for all outstanding Options held by the Option holder.

Pursuant to the provisions of ASX Listing Rule 7.3, the following information is supplied to shareholders in respect of Resolution 2.
Number of Securities to be issued:
23,076,923 options
Timing: It is expected that the options will be issued at the same time as the Convertible Security being within 7 days of obtaining of shareholder approval to the resolutions the subject of this meeting. The options will be issued and allotted not later than 3 months from the date of this General Meeting.
=======

The Convertible Note should have been issued within 7 days of the GM, if I read the above correctly.

In terms of cash flow and "The Australian" report, at 30 Sept they had $9M in the bank, and net outgoings of $3M per Quarter. The $9M will last them 3 Quarters at that burn rate if no gold production increase.

They made a loss for the full year of A$2.4M,so if they repeat that performance, the $9M would last about 3-4 years. If they get to 20,000 oz/year rate, they generate $20M revenue with costs of $10M for gold production ($500 per oz) plus $5M in exploration and about the same in overheads (i.e. breakeven at 20,000 oz/year) based on the June Quarter cash flow (Appendix 5B) figures for expl & o/heads.

They look OK with the $9M buffer and the Con Note should have already been issued, so funds should appear shortly.