a growing gold producer

From The Australian Investor


Citigold Corporation Limited is a Growing Gold Producer Having Boosted Gold Production by 110% Last Quarter at its 10 Million Ounce Charters Towers Gold Deposit.
Citigold Corporation Limited is a gold producer primarily focused on development and continued exploration efforts at the prospective Charters Towers Gold Project in North Queensland. Back in 2005, the Company established a gold resource for the high grade deposit totaling 10 million ounces (23 million tonnes at 14 g/t gold) and quickly moved into production. Ever since, Citigold has continued to push ahead with underground development at Charters Towers.

The Company recently released its quarterly report for the quarter ended 31 December 2009. Citigold remains free of bank debt, has progressed towards a positive cash flow and most importantly has kept operating costs down.

In financial news, the profitability and efficiency of the operations at Charters Towers has trended upward since commencement of production, with revenue rising to almost $7 million per quarter in December 2009, representing an increase of over 800% in just three years.

Gold production for the quarter was 5,563 ounces, a 110% increase on the 2,609 ounces achieved in the previous quarter and best result to date. This was also 10% above the revised target of 5,000 ounces for the quarter.

The average sale price received was $1,225 per ounce and the average cash cost was $480 per ounce.

Average gold recovery for the quarter from the ore feed to the process plant remained high at 98%.

The Company also announced that it is planning to reactivate the City reefs within the Charters Towers Gold Project.

The City reefs are a defined major past gold producing area which contains a large 4.7 million ounces of the over 10 million ounce resource. With a strong gold price outlook and Warrior on a growth path, Citigold believes now is the ideal time to commence the planning stage to bring this prospective area back into production.

The Company also successfully acquired a 46% holding of Gateway Mining NL in October 2009 with the issue of 16.2 million shares to previous Gateway Mining shareholders.

Mr. Mark Lynch, CEO and Managing Director of Citigold Corporation Limited said the results from the quarter ended 31 December 2009 reflect a positive outcome, The quarterly report shows that we are starting to lift production at the Charters Towers Gold Project towards our annualised target of 300,000 ounces. We have ensured that we remain a low cost producer even in these times of strong gold prices. We are also excited to reactivate production at the City reefs. We are currently planning for this, Mr. Lynch told the Australian Investor, We aim to initially produce 200,000 ounces of gold per annum at the City reefs and 100,000 ounces of gold per annum at the Warrior mining area, which contains an Inferred Mineral Resource of 4.4 million tonnes at 14 g/t, containing 1.9 million ounces of gold.

Citigold has extensive prospective exploration ground holdings at Charters Towers outside the drilled 10 million ounce gold deposit. The Company is currently considering how these outer areas could be explored faster to transition them into additional mines.

Geophysical test work using down hole induced polarization is continuing at the Project and the Company said modeling work on drill holes tested before the Christmas break will be a priority from February 2010.