Shock, horror. Aaron Data Systems Inc, USA, has given CTO a lifeline. Quite a confusing deal but the way I read it, because CTO doesn't have two bob, this mob will purchase in situ gold and "provide the full working capital for the growth of gold mining...." Over a five year period to March 2022, CTO hope to produce and sell to this buyer 66,000 ounces worth about $AU100 million. I still don't believe it. What will happen to the current CTO debt of approx $24 million? Will the buyer cover this debt before committing funds for mining? Certainly creditors would be extremely unhappy if their debts weren't paid first.
Knowing CTO's history many things can potentially go wrong. I'm surprised that the ASX allow them to still be listed as they appear to have broken some of the listing rules, particularly the one that states that a member company must disclose any facts that may impinge on the share price. I particularly refer to events of a year ago where the handful of staff weren't paid and apparently still haven't been paid. This strongly smells of trading whilst insolvent.
The other problem is can they produce the gold? Certainly nothing within 12 months. Then how much gold can be produced from the Central Decline. With no detailed resource drilling to date they might jag 50,000 ounces in two years. Then there is the dilapidated mill. It's had it! Really, has Aaron Data Systems done their homework. What do they know about gold mining anyway? If the Ozcoin connection is true then it maybe one virtual gold coin company joining forces with an Australian virtual gold mining company. At least Ozcoin are attempting to put some real credibility behind their coins by backing them with real gold. It might work but I am very sceptical. Good luck to all holders.
As I have said before, CTO need to employ a contract mining company to mine the gold because their mining track record is not good.
Once again, DYOR, my thoughts only.
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