Ann: Quarterly Activities Report and Appendix 5B, page-36

It is of my understanding that undergound ore mining is more difficult and more expensive than open pitt mines. Citigold is an underground gold mining project in which its many tenamanets are either very close to the town of Charters Towers or actually comprise some really valuable ($) mineable tenemats benetah the town of Charters Towers, QLD. Here's what Google says about the town: Charters Towers is a town within the Charters Towers Region in northern Queensland, Australia. It is 134 kilometres inland from Townsville (a large sea-side port) on the Flinders Highway. At the 2016 census the population was 8,120 people. WikipediaIt. With the previous/past relatively low gold prices and the rather costly and environmentally sensitive mining under and around Charters Towers is not an easy chore. It is also my understanding that the directors of CTO have been waiting for a)gold pices to increase b)to develop new ways of underground mining (particularly immedietely beneath the town). Both of these objectives have been achieved now. Read below to for further info....

Central Mine Overview
The Central Mine, located adjacent to 30 Nagle Street Charters Towers, is centred around the initially
excavated 'Brilliant East Decline' that dives down at 1:7 down slope, underneath the City, to over 200
metres depth in the strong granite country rock. Previous trial production mining the 'usual way' at
Warrior (and in 1994-2000 at Central) identified the challenges to and constraints on 'ultra low cost
mining'. While we have been in the project development financing stage, our efforts have been to
develop an ultra-low-cost mining system.
The mine we are building is planned to produce for very
many years, based on known mineral resources, and is
located in a sensitive location underneath a City. The City
creates many advantages and also many challenges that
most mines do not have in the remote outback. A long life
mine can generate many benefits for the local community
and Company. The Gold price is good now, but many years
ahead might change. Just as Amazon and Tesla reimagined
their 'industries' with new methodologies and tech, the Citi
team has done similarly for its gold mine.
The Company and its independent mining engineering consultant, Prospector Enterprises, reviewed over
the last two quarters the mining design, engineering plans and other mining data for Central which is
being optimised substantially because of technologies available today which were not available 5 years
back.
This search has been worldwide, meeting and discussing technology and 'what is possible', including
with non-mining civil construction original equipment manufacturers and operators.
Central Mine Optimisation
In consultation with project managers and design engineers, an innovative mining system has been put
together that takes an efficient 'keyhole surgery' approach to our mining and thereby doing what needs
to be done for the geometry of our ore system that in itself is somewhat unique. Make small holes, and
just extract the valuable ore.
During the Quarter, the Company adopted the use of two small declines, commencing circa 1,300 metres
down the current single decline. The 'twins' require smaller blasts, excavate less rock than single
standard decline and less rock to move. One decline will be used for downcast air and the other used for
upcast, thereby creating good ventilation at all times and two egresses. The declines will allow flexibility
for material and personnel movements in and out of the underground.
A production sequencing advantage is that when the decline(s) are nearby or junction into the reef for
gold production, then stope development and ore stoping can begin. This is because the 'twins' also
create flexibility of two means of continuous interval egress, as required by mining regulation. The
'second egress' requirement was previously a constraint in Company's past mining of 'top to bottom' and
long lateral extent of the reefs.
Under the old mine plan the constraint of having to first open up the 'King Shaft', referenced and imaged
in previous announcements, has been removed thereby shortening the lead time to gold production.
The decline(s) path is essentially the same. Preliminary costings indicate the twin decline are within
existing budget.
Central Mine Site Offices inside
environmental barrier Nagel Street
Citigold.com Page 3
The movement of ore and waste to the surface will be done by electric conveyor. This removes trucks
and the associated diesel fumes from the underground, improving the air quality for the miners and
reduces the cost of ventilation. With diesel trucks removed, the mine is safer because the potential for
diesel fuelled fires underground are removed or greatly reduced.
To ensure harmony with the environment the mine will eventually be renewables powered. The sites
have recently been selected and will progress at a time by others independent of the mine.

I am eager to hear more on the planned financing arrangement due before or by year end.
The fact is there is a long life mine here with valued gold reserves, someone sooner or later will have to mine it. I think the time is ripe now. I am anticipating good things to roll. This is my opinion only...