citigold signs loi with henan jinqu gold

Citigold Signs LOI with Henan Jinqu Gold
19 May 2010: Brisbane, Australia Citigold Corporation Limited (Citigold)
(ASX:CTO, FSE:CHP) advises that it has signed a binding Letter of Intent (LOI) with
Henan Jinqu Gold Company Limited (Jinqu), China. This LOI, signed today in
Sanmenxia City, China, is the next stage agreement following the Memorandum of
Understanding (MOU) signed in Australia on 4 March 2010.
This signing builds upon the MOU and follows on from the recent inspection of
Citigold's Charters Towers operations by Jinqus technical team. This inspection was
the start of the more formal due diligence process and included the site of the
proposed City mine to be developed and operated through an incorporated Joint
Venture.
The stated intent of Jinqu and Citigold is that the LOI will be replaced by a
comprehensive Joint Venture Agreement to be concluded and signed within 3
months. The agreement is subject to due diligence by both parties and FIRB
approval.
The Charters Towers "City" is an important development for Citigold wherein all the
capital is provided to develop this mining area into a substantial gold producer aimed
at producing 200,000 ounces per annum. The City mine will work several adjacent
reefs as a major mine. The two year development time means that extensive
underground development can take place to ensure a consistent gold production
ramp up.
Henan Jinqu Gold Company Limiteds main industry is the exploration, mining,
processing and smelting of gold. Jinqu is a member of the Shanghai Gold
Exchange.
The joint venture will comprise granted mining rights with permits to mine and
associated infrastructure containing a gold Mineral Resource of 1.8 million ounces*.
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Citigold Corporation Limited
Level 15, 348 Edward Street, Brisbane QLD 4000 Australia
Tel:+61 (0)7 3834 0000 Fax:+61 (0)7 3834 0011 www.citigold.com
The joint venture does not include the separate 100% owned Warrior mine and the
existing 340,000 tonne capacity gold processing plant. Independent of the joint
venture Citigold hopes to accelerate work towards growing gold production from
other areas of the goldfield and to increase the overall gold reserves and resources.
The re-establishment of the Charters Towers "City" mine is a major part of Citigolds
growth strategy and a strong, experienced long term partner will produce benefits for
both parties.
For further information contact:
Mark Lynch Matthew Martin
Managing Director/CEO Company Secretary