Just answering questions asked over weekend.1. Re "The market...

Just answering questions asked over weekend.

1. Re "The market doesn't believe in the 10 million oz yet alone the 50 million. I'm wondering why they are doing more exploration if they have 10million, why not just mine something."
Chris Towsey says that part of their exploration is replacing mined reserves, part is converting resources to reserves to increase the asset backing for the share price, and part is exploring for new sources of gold.

2. Re "I didn't really see many people around on the mine in that video."
Garry Foord said they had 112 employees. We saw the Location Board at the mine, which showed 3 underground shift crews with 12 men per crew plus supervisors, surveyors and geologists. Garry said underground mining and geology make up about 45% of the workforce, 25% are mechanics, fitters
and electricians, 10% in the Mill and 20% supervisors and admin.

3. Re "progress on the deep hole"?
Chris Towsey said they expect to hit at least three veins - the Columbia and St Patrick Cross Vein first and then further down the hole extensions of the Brilliant and Day Dawn. [(Sid) And that's before they reach any Mother Lode].

4. Re "Where is the newsletter/ASX release letting all investors know that petroleum products (diesel,lubricants and hydraulic oil) only make up 3% of CTO's operating costs?"
I asked Chris Towsey what the impact of the oil crisis was on Citigold, and he supplied that information. If you want detailed information, ring Citigold's office at 0738 708000. They're always happy to talk to investors. [(Sid): Maybe mention you've read Sid's posts at Hotcopper and seen his video. Chris was with us on the videoed tour... the guy on back seat]

5. Re "I am constantly surprised by the manner in which the share price is sold down when it hits $0.28.".
Chris Towsey says that he has no accurate information on why the shares behave as they do. He said shareholders are entitled to buy and sell for their own reasons, so he would only be guessing at why any particular parcel changed hands at a certain price.
He speculated that it could be people with margin loans, who are forced to sell off a proportion of their shares if the price dropped, but said he is only guessing. He did say that a share can only be sold if there is a willing buyer, so that the upside is that lots of people snap up the shares offered, so presumably the buyers believe it's a good buy. He said a common rule of thumb in the industry is to value a resource ounce at A$25 to $50 per ounce, so the 10 Moz resource on the lower figure basis would be an asset of $250 million. He said their last announcement on 26th May showed they had 678,644,974 shares on issue, which for a $250 M asset gives an asset backing of 37 cents per share. He said the Half Yearly Report ended 31 Dec 2007 showed net assets of $187 M, which gives a net asset backing of 27.6 cents per share - about what it currently trades at. He said the market is not showing any premium on the price for being in production, being debt-free, being unhedged and having a cash flow, or for the 10 Moz resource, or for the future gold price potential.