Citigold Corporation
www.citigold.com
www.citigold.com
Citigold Corporation is an Australian gold mining company producing from Australia's highest grade gold deposit at Charters Towers in north eastern Australia.
Further advances for Citigold at Charters Towers Gold Project
Citigold Corporation (ASX:CTO,DIFX:CTO,FSE:CHP) has reported further advances have been made for the quarter ended 31 December 2008 in mine operations at the Charters Towers Gold Project.
The highlights for the Quarter included:
- Capital works expansion program progressing: Up 14%
- Western Decline was focus for the quarter
- Next gold production area accessed by decline
- Gold production 2,569 oz
- 7% increase in underground productivity
- Diamond core drilling up 25%
- Down hole radar tests successful
- Deep Hole drilling completed
Capital works
The focus in the Quarter was advancing the capital works with the extension of the Western Western Decline parallel to the ore on the Warrior reef. While these capital works were underway gold production continued on a reduced scale producing 2,569 ounces. These works should allow additional gold production areas in future quarters.
2009 The Year Ahead
2008 was a successful consolidation year for Citigold with the completion of the power upgrade, the move to 24/7 operations and successful trialing of underground radar techniques.
Citigold is now in a situation where capital works are moving in front of mining operations therefore allowing production to begin to commence from multiple areas. These capital works should ensure a significant increase in production throughout 2009 as more mining areas are accessed.
Although the gold price is out of the Company’s control it forms a key component of the revenue base since the gold produced is sold at the spot price at the time of sale. The planned increase in 2009 of gold production comes at an optimal time in the gold market. Citigold receive all of its revenue in Australian dollars and the gold price in Australian dollars has remained near all time high levels due to a consistent United States gold price and the fall in the Australian dollar. Gold market sentiment is more driven by the United States dollar price, which remained strong through 2008 and into 2009.
Mining Operations
The focus of the December quarter was the capital works for the underground access, in the Western decline. These works need to be completed prior to lifting gold production. The capital development was hindered in the past due to lack of power. The December quarter was the first quarter that the underground had been operating on a 24/7 basis with the required power and this resulted in an increase in capital works advance of 14%, bringing the total underground capital development to 835 metres for the quarter.
A new ore production area has been accessed off the Western Decline, with initial face grades running as high as 20 grams to the tonne. While the levels do not average these grades the assays are indicating that the stopes should perform well. As the number of working areas increases the high grade tonnes mined can increase. The capital works are well advanced towards a third production area.
A new ore-producing area was accessed during the Quarter from the Western Decline. This means that the Company now has two production areas from which to draw gold ore from which should result in increased ore production over the following quarters. The Western decline will continue towards the third planned mining area during the first quarter 2009.
However with the focus now shifting to production it will not be accessed until towards the end of the first quarter 2009. Underground capital works for the quarter included 835 metres (732 m last Quarter), up 14%, comprising 53 metres of capital development in ore and 782 metres of capital development parallel to the ore body. This takes total capital works for the calendar year to 2,758 metres.
The mill continues to perform well with recovery of gold from the ore remaining high and averaging 97.4% during the quarter. The metallurgical aspect of the ore has routinely been simple and remains indicative of the relatively easy milling Charters Towers ore. Gold sold attributable to the quarter was 2,569 ounces. The average price received was Australian dollars $1,191 per ounce.
Exploration
On 16 October 2008 Citigold announced that the Deep Hole had hit its first main target and the Brilliant target zone was located deeper in the hole. The final depth of the hole was 2001 metres.
Citigold Corporation’s Managing Director and CEO Mr Mark Lynch said, “the results from the deep hole prove that the Charters Towers mineralised system extends to depth beyond the limits previously mined and remains open at depth and to the east”. The results confirm the presence of gold related alteration and mineralisation and demonstrate that the mineralised structures persist to at least 1,900 m depth on the eastern side of the gold field.
Finance
This quarter continued to see the Australian dollar gold price increasing, with the average sale price exceeding $1,190 per ounce. The cash operating cost per ounce for the Quarter remained under $500, at $482 per ounce. During January the Australian dollar gold price has continued to increase and is currently over $1,300 per ounce.
Due to economies of scale the increase in production planned for 2009 should result in the cost per ounce starting to decrease from the current levels and approach the targeted cost per ounce of $350 at full production.
Reduction in development costs
The previously announced Dubai deal will fund future increases in gold output through the current capital works program. With the focus of the Quarter being on the advancement of capital works the majority of the expenditure was related to capital development. As the focus now shifts to production and becoming cash flow positive by June 2009 it is expected to see a reduction in development costs during 2009.
The highlights for the Quarter included:
- Capital works expansion program progressing: Up 14%
- Western Decline was focus for the quarter
- Next gold production area accessed by decline
- Gold production 2,569 oz
- 7% increase in underground productivity
- Diamond core drilling up 25%
- Down hole radar tests successful
- Deep Hole drilling completed
Capital works
The focus in the Quarter was advancing the capital works with the extension of the Western Western Decline parallel to the ore on the Warrior reef. While these capital works were underway gold production continued on a reduced scale producing 2,569 ounces. These works should allow additional gold production areas in future quarters.
2009 The Year Ahead
2008 was a successful consolidation year for Citigold with the completion of the power upgrade, the move to 24/7 operations and successful trialing of underground radar techniques.
Citigold is now in a situation where capital works are moving in front of mining operations therefore allowing production to begin to commence from multiple areas. These capital works should ensure a significant increase in production throughout 2009 as more mining areas are accessed.
Although the gold price is out of the Company’s control it forms a key component of the revenue base since the gold produced is sold at the spot price at the time of sale. The planned increase in 2009 of gold production comes at an optimal time in the gold market. Citigold receive all of its revenue in Australian dollars and the gold price in Australian dollars has remained near all time high levels due to a consistent United States gold price and the fall in the Australian dollar. Gold market sentiment is more driven by the United States dollar price, which remained strong through 2008 and into 2009.
Mining Operations
The focus of the December quarter was the capital works for the underground access, in the Western decline. These works need to be completed prior to lifting gold production. The capital development was hindered in the past due to lack of power. The December quarter was the first quarter that the underground had been operating on a 24/7 basis with the required power and this resulted in an increase in capital works advance of 14%, bringing the total underground capital development to 835 metres for the quarter.
A new ore production area has been accessed off the Western Decline, with initial face grades running as high as 20 grams to the tonne. While the levels do not average these grades the assays are indicating that the stopes should perform well. As the number of working areas increases the high grade tonnes mined can increase. The capital works are well advanced towards a third production area.
A new ore-producing area was accessed during the Quarter from the Western Decline. This means that the Company now has two production areas from which to draw gold ore from which should result in increased ore production over the following quarters. The Western decline will continue towards the third planned mining area during the first quarter 2009.
However with the focus now shifting to production it will not be accessed until towards the end of the first quarter 2009. Underground capital works for the quarter included 835 metres (732 m last Quarter), up 14%, comprising 53 metres of capital development in ore and 782 metres of capital development parallel to the ore body. This takes total capital works for the calendar year to 2,758 metres.
The mill continues to perform well with recovery of gold from the ore remaining high and averaging 97.4% during the quarter. The metallurgical aspect of the ore has routinely been simple and remains indicative of the relatively easy milling Charters Towers ore. Gold sold attributable to the quarter was 2,569 ounces. The average price received was Australian dollars $1,191 per ounce.
Exploration
On 16 October 2008 Citigold announced that the Deep Hole had hit its first main target and the Brilliant target zone was located deeper in the hole. The final depth of the hole was 2001 metres.
Citigold Corporation’s Managing Director and CEO Mr Mark Lynch said, “the results from the deep hole prove that the Charters Towers mineralised system extends to depth beyond the limits previously mined and remains open at depth and to the east”. The results confirm the presence of gold related alteration and mineralisation and demonstrate that the mineralised structures persist to at least 1,900 m depth on the eastern side of the gold field.
Finance
This quarter continued to see the Australian dollar gold price increasing, with the average sale price exceeding $1,190 per ounce. The cash operating cost per ounce for the Quarter remained under $500, at $482 per ounce. During January the Australian dollar gold price has continued to increase and is currently over $1,300 per ounce.
Due to economies of scale the increase in production planned for 2009 should result in the cost per ounce starting to decrease from the current levels and approach the targeted cost per ounce of $350 at full production.
Reduction in development costs
The previously announced Dubai deal will fund future increases in gold output through the current capital works program. With the focus of the Quarter being on the advancement of capital works the majority of the expenditure was related to capital development. As the focus now shifts to production and becoming cash flow positive by June 2009 it is expected to see a reduction in development costs during 2009.
