in not out, page-5

As shareholders, we are in a relatively powerless position, We give the company our money, which in many cases has been earned the hard way, and hope that the company makes good use of it, and maybe provides ongoing returns for the investors. The negative sentiment towards this stock appears driven by anger and disappointment over the slower than expected progress. So let's look at the reasons for this slow progress.

In the 1990's, the original plan was to farm out a 50% share in the project in return for funding. This didn't happen, so the company went it alone, relying on shareholders for the funds needed. As a result, we shareholders now still own 100% of this project.

In the 2000s, some said that the company should have raised debt to advance the project quickly. This would have meant hedging forward production to collateralise the loan. In 2005 the average gold price was about AUS$550, so at that time, the hedging would have been at around AUD$450, and the company would have been obliged to deliver gold today for a price barely above costs for years to come. Instead, the company relied on shareholders for funds, and has advanced the project slowly since then, on the smell of an oily rag.

So today Citigold is unhedged, debt-free, free to sell gold at market price - about AUD$1,100 an ounce, and still the project is 100% owned by shareholders at a time when the gold price is soaring.

Maybe over the years mistakes have been made, maybe the directors could be more skilled or energetic, but finally we seem to be at the point of seeing a return on the investments we've made over many years. Now is not the time to sell.