email to md

The following email was sent to the MD at 2.40pm on 16/11/10 and a copy also faxed to the Brisbane office.

In all fairness to the coy it was very late and not acknowledged.

As a matter of fact the meeting was over before everyone realised!

Most in attendance (~80 people) were going to the mine and a lot of preparation was required in form filling etc before departure.

It was a long day as we returned to Townsville around 8.30pm.

Information from the meeting and mine visit will be covered under a separate thread.

The email covered many but not all of the questions raised and at this stage I have not received a response.

I will follow up and report progressively!

Regards

----------------------------------------------------------

Mark,

Apologies for the late communication but the following are a number of questions for the Board to consider or cover at the AGM:-

1. Despite the glowing gold production forecasts made by Management before mining began and for some years following, Citigold has demonstrated an inability to generate a cash flow profit from mining in any year since mining began.
2. In the light of 1. above, to conserve the company's cash, why should Management not be paid a maximum salary of $100,000 a year until Citigold is able to generate an annual positive cash flow - and be self funding from gold production?
3. Have final payments been made to the Australian Gold Trust?
4. Can Citigold please explain to us why instead of being one of the 'largest and highest' ASX listed stocks by market capitalisation, as befits owning the 'largest and and highest grade' gold deposit in Australia, instead Citigold has its gold valued by the market at just a token $11 an ounce and a market cap. for 10 mill ozs at what must be seen as a token ~$100 mill?
5. Can Citigold also explain to us why with such as amazing disparity between the company's market capitalisation and the value of it's gold is not fending off takeover bid after takeover bid from just about every gold miner in Australia and overseas looking for large gold resources to add to their current mining operations?
6. What specific changes of mining operations does the new director Dr White recommend? What revisions would he make to the report on CTO's gold production plan he wrote in 2002 (dated 25 September 2002)? The gold resource potential (established by demonstrated procedures) at that time was 15M oz (to 2,000 metres). The development time to full production then was 5 years for a 250,000 oz per year mine!
7. Total investment in the project by 2002 was ~$52M and the company now has a value - 8 years later - of ~$100M after quite a few capital raisings. What has caused this devaluation under the management team?
8. Why is it only now prudent to reduce the size of declines/access drives and use smaller equipment - why not years ago? What are the trade-offs in making these changes?
9. How will the company finance the new 'loading machines' (Sept 2010 quarterly)? When do they expect delivery of these machines?
10. Does the company own the exisitng equipment or is it leased? If it is leased, is the leasing done through commercial facilities - or privately?
11. Why is the company spending time and resources on investments and developments (Gateway Mining/Anhui Geology being recent events) away from the core plan of developing the existing mine considering the time and effort that has been put into this project over the years? There has been no demonstrable benefit in all of the events that have occured away from the focus of the mine itself! Has management lost faith in the main mine?

There are many more questions that could be put to management, but it is felt that answers to the above will assist shareholders in understanding the delays that have occurred over the years.

Regards

Kosenar

and on behalf of other shareholders