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china confidential

Wednesday, November 26, 2008

 

Citigold Raises Cash, Lists on NASDAQ Dubai

Foreign Confidential....

Australian-based Citigold Corporation Limited (ASX:CTO; NASDAQ DUBAI:CTO; FSE:CHP) is now listed on the NASDAQ Dubai following the rebranding this month of the Dubai International Financial Exchange (DIFX).

Citigold Managing Director Mark Lynch said these moves reflect the growth of Dubai as an international financial centre. “Citigold’s recent $35 million capital raising deal with the Dubai Group demonstrates our company’s long term commitment to this major gold and financial centre. The region is now further enhanced through rebranding the international stock exchange, Nasdaq Dubai."

Adding further strength to Citigold’s fundamentals is the current Australian gold price which is above $A1,200 per ounce with the fall in the Australian dollar.


Earlier Placement to Dubai Group

The Dubai Group, a leading diversified financial services company of Dubai Holding, through its subsidiary Dubai Ventures Group Limited, acquired up to an 18% stake in Citigold for A$ 35 million. The capital raising raised up to A$35 million through a staged securities placement to Dubai Group. Initially a placement of 50 million shares at A$ 0.20 per share (A$10 Million) will be carried out followed by a Convertible Loan at a 9% p.a. interest rate that is convertible into shares of the Company at A$ 0.26 per share within a 2.5 year term.

Lynch said, “this transaction reflects our long-term view on gold and Citigold’s ability to enhance shareholder value by ramping up production to 250,000 ounces per annum by 2011.” Citigold re-affirmed its 10 million ounce gold deposit at Charters Towers.

During the September quarter Citgold's completed the capital raising to underpin the capital works program at the Charters Towers gold mining operations. Citigold aims to ramp up production and increase Citigold’s status to a mid tier gold producer. This saw the removal of a major restriction to the ramp up of mining operations, with the completion of the 3MW electric grid power upgrade to site. The completion of the upgrade coincided with the move to a 24/7 operation. This combined increase in both power and operating time in August has now been established. Citigold is now accelerating the underground capital works necessary for increasing gold output.

The mine plan is to achieve an output, at full production, of over 300 000 ounces of gold per year from the overall Charters Towers Project. The review concluded that current mine planning is largely based on actual achieved performances. On the basis of the equipment that Citigold now owns and operates, plus the judicious use of specialist contractors when required, there is no technical reason why the development and production targets should not be achieved.


Gold Production

Gold revenue for the quarter from production was A$4.33 million on the sale of 3,960 ounces. This was at an average per ounce sale price of A$1,094 per ounce. The cash operating cost for the quarter was A$371 per ounce. The amount was lower than usual due to the fact that some of the production was mined and expensed in the previous quarter. Excluding the previous quarters production the cash operating cost would have been approximately A$480 per ounce. The cash operating cost coupled with the current Australian gold price, above the $1,200 per ounce level, implies a gross profit margin above 50 per cent.

Cash at end of September quarter was $9.0m. Market Capitalisation was $133m. Citigold's last trading price was 20 cents, up 14.5%