cto mou

To all those who have criticised the CTO Memorandum of Understanding (MOU).

First, before you sit there and criticise, why don't you contact the company first? I say this because most of your statements are just plain wrong. I know there has been disappointments about this stock, but please stick to the facts.

Anyway, I contacted the company, and a senior employee provided the follow comments to some of the statements made:

-The below is factual information. The numbers are published in the release, the Dubai investment is public knowledge. The analysis is a reasonable deduction from the published numbers.
-Read the release. Note there is nothing in it about issuing any equity. No cheap shares or options.
-There is nothing in it about us having to fund our half of the JV - why would we have to put in any cash when we are handing them 50% of 1.8 million ounces of gold??? Gold is money.
-50% of 1.8 million ounces is $990 million in revenue at $1100/oz. If the profit margin is $500 per oz, the 50% is worth $450 million in profits over whatever period of time it takes to mine 1.8 M oz - 18 years at 100,000 oz/year. The return would be $25 M per year - takes them 3 years to get their $70 M back, doubles their money in 6 years. Reasonable investment return.
-And we retain 100% ownership of the remaining 8.2 M oz in our 10 M oz resource.
-"nomoregfc" is wrong when he states we got nothing out of Dubai - we got $10 million in cash, to fund Warrior.
-"Veet14" is wrong - we don't have to put in cash to fund the JV - we put in gold. This is the "consideration" - not "we don't know the consideration". Clearly stated we give them 50% of 1.8 Moz, they give us $70 M, which they risk for 3 years before they get it back. High risk warrants high return.
-"mdan" is wrong - we don't have to stump up any cash. Therefore everything else he says is irrelevant.
-"DHarv" is wrong - it's not a terrible deal - it's a good deal for CTO - no cash to put up, no dilution of shareholders, no options issued, partner is (indirectly) the Chinese government (most Chinese "companies" are controlled by the central govt), we retain 80% of the gold resource, no debt to repay, repayments from cash flow directly linked to gold production, it values 20% of the project at $70 million, therefore total project value is $350 M - 36 cents per share. It's a calculated risk for Henan Jinqu - they risk $70 M for up to three years. No-one in Australia would accept that level of risk - and the Chinese are not silly, they are very astute businessmen.

If you disagree, please don't sprout misinformation at this web-site until you have contacted the company first. Phone 07 38340000.