10c, page-13

@brownbag I never refused to answer those questions at all,I was stating my frustration because I had answered the question RE production over and over and the same question kept popping up!

I will say it again. Production has been lower because they do not have the benefit at present of being able to access multiple stopes to enable them to average the ore to 10g/t. Not all stoping ore is the same grade.

They have to take what they can get and they are currently processing ore from the development drive with ore from the stopes that they can currently access and as such the head grade is lower.

This will change and it is changing as they open up more of the reef, however it has taken longer than management anticipated, BUT they are very confident that the production model and the ore body model is accurate.

I have confidence that this year in spite of management downgrading production to 50K oz that they will exceed that target and may produce closer to the original target of 80K. (That is just my hunch BTW)

The other part of his question was directed toward my valuation based on earnings.(badly chosen word on my part)

I should have stated REVENUE.

However IF production can continue at 4th qtr levels for a full year then based on revenue @ AUD1250 p/oz and cash costs of AUD500 and an increase in the float after the SPP to 1b shares they would be undervalued at .12.

If they can lift production to 50K oz for the full year then they are potentially a 3 or 4 bagger from IMO.
Now if Gold can go to $2k US by December 2010, CTO could go from being a hopeless cause as many currently feel it is to a bright shinning light.
I still feel that CTO is turning the corner, I have felt that since last September when I got back in. In hindsight I was too early, but I am still confident that at some point the market will have no choice, due to developing fundamentals, to re-rate it higher.
I am a buyer here and only time will show who is right, but that is how it works. Some win, some lose.
Cheers