There's one thing I definitely liked about this report....

There's one thing I definitely liked about this report. Considering the company had a record quarterly gold production it's been toned right down and become much more conservative/realistic:

Eg:

"During the past Quarter the Company amended its production estimate for the Quarter. This resulted from a mining area producing a relatively small tonnage compared to the original geological model. A very high grade intersection had biased the ounces in a way that had not occurred before.

Interestingly subsequent development of the ore body along strike to the west of this area is producing new ounces that may eventually come close to the ?lost? ounces over the last Quarter.

This confirms that the Company needs to continue to open up the reef so that there can be multiple stoping panels that will help improve the reliability of production estimates."

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"The underground gold production is still limited by the rate at which the high-grade areas can be defined for the mine plan.

This development scheduling is still behind but the rate is improving and management is focused on optimising the premining work so that development and gold output can progress faster. The processing plant still has substantial spare capacity."

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Gold production totalled 5,563 ounces for the Quarter, an increase of 110% on the 2,609 ounces for the previous Quarter. This was 10% above the revised target of 5,000 ounces for the Quarter.

The average sale price received was A$1,225 per ounce during the Quarter and the average cash cost was A$481 per ounce.

Currently the Company is both building the mine and operating it. The building costs are capitalised and subsequently amortised as the mine life reduces in accordance with accounting standards. Only the amortisation is included in the calculation of the per
ounce cash cost. Once construction is complete and expansion capital works expenses end, cash costs are forecast to be under $400 per ounce."

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"The 2009 year was not a strong year for the share price."

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A look at the cash flow indicates CTO is still significantly cash flow negative. Receipts were $6,065 million while expenses were $8.232 million, including $988,000 administration expenses.

I suspect CTO needs about 8,000 ounces of production in a quarter based on the current gold price and expenses to break cash flow even.

Cash at end of quarter was only $951,000.