late mail!

Afternoon Business News and Market Wrap - 16th February 2010

From: The Australian Investor ([email protected])
Sent: Wednesday, 17 February 2010


Dear manfred

TONIGHTS EMAIL IS SPONSORED BY CITIGOLD CORPORATION LIMITED, a gold producer primarily focused on development and continued exploration efforts at the prospective Charters Towers Gold Project in North Queensland.

Back in 2005, the Company established a gold resource for the high grade deposit totaling 10 million ounces (23 million tonnes at 14 g/t gold) and quickly moved into production. Ever since, Citigold has continued to push ahead with underground development at Charters Towers.

The Company recently released its quarterly report for the quarter ended 31 December 2009. Citigold remains free of bank debt, has progressed towards a positive cash flow and most importantly has kept operating costs down.

In financial news, the profitability and efficiency of the operations at Charters Towers has trended upward since commencement of production, with revenue rising to almost $7 million per quarter in December 2009, representing an increase of over 800% in just three years.

Gold production for the quarter was 5,563 ounces, a 110% increase on the 2,609 ounces achieved in the previous quarter and best result to date. This was also 10% above the revised target of 5,000 ounces for the quarter.

The average sale price received was $1,225 per ounce and the average cash cost was $480 per ounce.

Average gold recovery for the quarter from the ore feed to the process plant remained high at 98%.

The Company also announced that it is planning to reactivate the City reefs within the Charters Towers Gold Project.

The City reefs are a defined major past gold producing area which contains a large 4.7 million ounces of the over 10 million ounce resource. With a strong gold price outlook and Warrior on a growth path, Citigold believes now is the ideal time to commence the planning stage to bring this prospective area back into production.

The Company also successfully acquired a 46% holding of Gateway Mining NL in October 2009 with the issue of 16.2 million shares to previous Gateway Mining shareholders.

Mr. Mark Lynch, CEO and Managing Director of Citigold Corporation Limited said the results from the quarter ended 31 December 2009 reflect a positive outcome, The quarterly report shows that we are starting to lift production at the Charters Towers Gold Project towards our annualised target of 300,000 ounces. We have ensured that we remain a low cost producer even in these times of strong gold prices. We are also excited to reactivate production at the City reefs. We are currently planning for this, Mr. Lynch told the Australian Investor, We aim to initially produce 200,000 ounces of gold per annum at the City reefs and 100,000 ounces of gold per annum at the Warrior mining area, which contains an Inferred Mineral Resource of 4.4 million tonnes at 14 g/t, containing 1.9 million ounces of gold.

Citigold has extensive prospective exploration ground holdings at Charters Towers outside the drilled 10 million ounce gold deposit. The Company is currently considering how these outer areas could be explored faster to transition them into additional mines.

Geophysical test work using down hole induced polarization is continuing at the Project and the Company said modeling work on drill holes tested before the Christmas break will be a priority from February 2010.

Citigolds target is to lift gold production to 50,000 ounces of gold per year, and then increase this target again next year. In about 24 months time we anticipate production at the City reefs, which will add to overall production at the Charters Towers Gold Project.

In 2010, we will be completing lots of ongoing mine-focused drilling. However later on in the year we intend to do more exploration drilling across our tenements at Charters Towers. Mr. Lynch explained.

Mr. Lynch said the Projects large size and low cost production have helped make the last quarter very successful for Citigold, The last quarter has been a continuation of what we do. We have a very large gold asset, we manage a low cost operation and because of this, the project continues to move forward. We have spent about $160 million on the development of the Charters Towers Gold Project, which is an incredibly low cost. Other projects of similar size have spent up to four times more than this, he said.

Looking to the future, Mr. Lynch concluded, Our main priority is to scale up mining operations and to increase gold production at the Charters Towers Gold Project. We have learnt a lot about the ore body here and we are looking towards expanded gold production and gold reserves. We will do this through further exploration drilling.

For more information on Citigold Corporation Limited and this new development CLICK HERE: http://www.australianinvestor.com.au/linkt.aspx?id=205

ASX Afternoon Market Wrap 16th February 2010 Share Market Up, Led by Financial Stocks.
Financial stocks led the Australian share market higher, boosted by a stronger-than-expected first-quarter cash profit figure from Westpac.

At close of trade the ASX 200 rose 22.3 points to 4567.8 and the All Ordinaries was up 20.4 points ...

For a full market wrap, visit our Stockmarket News section
http://www.theaustralianinvestor.com.au/newshome.asp