Dear Whereu (on a CTO forum the name whereAU would have been...

Dear Whereu

(on a CTO forum the name whereAU would have been more appropriate)

I recognize a lot of what you are saying. I too was drawn into CTO by the big 10 million inferred number. I have also sold at a loss some time ago, after having lost faith.

And like you I should have known better. I should have realized I was a latecomer. Why had the JORC been out for years and was this mine still so cheap? Now I know: quality has its price.

I should have looked better at the terms used. You say a 10 million ounce reserve. That's the wrong term. CTO has 10 million ounces of inferred RESOURCES. Reserves are proven to be economically and resources are not. If you look at Citigolds site you can find their reserves. According to a 2005 report they are only 330.000 ounces and given what was produced since then I think that even that number was too high.

I think the gold veins are narrow and hard to find. Much development drilling is needed. The reported cash costs are way too low, because Citigold doesn't properly expense its development drilling.

In my opinion management has made errors that made Warriors gold uneconomical thusfar. If they had things properly they would have been a highcost, but profitable producer. A company like Bendigo might have been a good comparison.

So I think that Citigold has a resonable but not a fantastic resource. A fantastic resource is one where any idiot can run the mine and make a profit. But Citigold requires a much smarter manager. So unless there is a management change, you will never again see my money near this mine.