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.
Citigold Corporation Chris Towsey tells investors, optimistic on hitting gold production targets
Chris Towsey chief operating officer of Citigold Corporation (ASX: CTO) told delegates at Mining 2009 in Brisbane that his relocation to the Charters Towers gold project in Queensland - taking day-day control would assist the push to ramp up gold production.
Also outlined were the growth in shareholders to 11,200, the increase in net assets to $225 million, inclusion in the ASX Top 200 and an increase in institutional holders on the register.
The latter were also a factor in the volatility in the company's share price he said.
Despite a lower than expected gold production for the quarter, Towsey re-iterated the company's belief that Citigold could still achieve the targeted 25,000 ounces of gold production for calendar 2009 - "or near enough to it".
In fact, investors heard that the company was bullish that changes in mine site personnel, would see an improvement in production, hitting 85,000 ounces in 2010 and reach 160,000 ounces in 2011.
This would be achieved by bringing Sunburst into production.
Metallurgically, the ore at Charters Towers is very simple he said.
The company required gold production of 25,000 ounces per annum to be profitable, given the $4-5 million of exploration expenditure. If this was taken out of the equation, the mine was profitable at 20,000 ounces of gold production he said.
Cash costs were $400/oz with revenues of $1120-$1150 per ounce, providing a strong operating margin for the company. Investors learnt the low-cost nature of the mine, provided the company with potential to pay dividends.
Towsey indicated he expected conversion of 80% from resource to gold reserves.
80% of the five known major east-west structures at Charters Towers were not yet drilled, and therefore not included in the 10 million ounce defined resource. The latter consists of 23 separate orebodies.
To achieve greater production, the company would excavate more tunnels to sustain a faster extraction of ore. An increase in tonnage and grades would lead to an increase in ounces produced.
Chris Towsey concluded, net asset backing was approximately 24 cents per share, and the current share price and valuation made no allowances for upside in production and asset value.
