No doubt their cash outflows are indomitably measured by semi-variable & fixed operational commitments such as payroll, utility & P/E lease overhead. Winding back any costs of production including the mine development initiative would affect the potential future rate of production of which they are now comitted to.
Nevertheless, I'm sure your final payment instalment remains a priority as it is secured.
Mining anything other than probable JORC resources requires varying degrees of luck. The inherent risks of investment are compounded if the success rate & yields of production are initially low for a junior company in its transitional phase to a self sustaining producer.
To date, Citigold has not achieved much more than demonstrated some capacity to inventively attract small investment tranches with its representations & some trial mining success.
Considering the actual cost of compounded capital expended to develop & establish a totally new underground mine "Warrior" from the face of the open pit trial, in hindsight it may have been more prudent at that time for the company to take the alternate stategic direction and re-open the "Sunburst" mine which forms part of the proven under city reefs.
On the positive, this company now has infrastructure in the form of an operational mine that is producing something (allbeit prehaps more silver than gold?), an upgraded processing plant producing dore, an upgraded power grid, mining plant & equipment (some leased).
It has the benefit of emerging into what is now considered to be the golden age. Hopefully Citigold can be a part of that.
Proper execution requires a skilled & competent management team with a proven track record to attract much needed captital investment for opening the expansive fields held under its tennament. To date Citigold have yet to prove that value conclusively to the institutional & retail investor market.
Unfortunately many representations made over the years has raised the question as to whether or not those that inherited & run this company can be believed to actually deliver "value" to its shareholders. If not properly qualified, then they should seriously consider surrendering their active position for a passive consultative role for the greater benefit of the company & its shareholders.
Shareholders are now expecting "Warrior" to pay dirt for ongoing expansion of its stopes. The demand for delivering performance driven production results based on the company's representations made over recent years will warrant cause for its ability to continue as a producer in the medium term.
I came across an article recently by Kym Livesley of Gadens Lawyers, Sydney entitled "Liability of Competent Person for JORC reports" which was published in the Bulletin of the Australasian Institute of Mining and Metallurgy in January/February 2008.
Those that read this forum may be interested at: http://www.jorc.org/pdf/livesley.pdf
Add to My Watchlist
What is My Watchlist?
