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In reply to: nifty49 on Tuesday 07/08/07 04:39pm

cto production is up 118% to 1887 ozs for the month.they are gaining momentum in there production and it should only get better plus the price of gold might just be about to creep towards $1000 oz mark????

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Interesting development?

 

Citigold planning JV in India

 

 

August 24, 2007 - 7:44PM

 

 

Australian miner Citigold Corp is in talks to form an exploration joint venture in India, the world's biggest gold consumer, a senior company official said.

 

"We are talking to 2-3 Indian parties," Manan Desai, head of international operations, told Reuters in an interview on the sidelines of a conference in Mumbai.

 

"There is gold here. It is the question of getting the right technology for getting it out."

 

The planned joint venture will be controlled by an Indian company with Citigold holding minority interests, he said.

 

Citigold has confirmed gold deposits of 311,000 kg and is also looking to supply gold from its mines in Australia for refining in India, he said.

 

"India is attractive because it consumes around 740 tonnes of gold annually, out of which only three tonnes are produced locally," he said.

 

India consumes a fifth of the world's gold output. Jewellery accounts for 80 per cent of Indian sales, much of it handmade and fashioned in small workshops, often using mouth blowpipes and candle or oil flames.

 

Desai said Citigold would look at exploring gold in known places such as in the southern Indian state of Karnataka and the western state of Rajasthan.

 

"We are of the view that the new mining policy, being considered by the Indian government, will definitely help us in our exploration plans," he said.

 

India's proposed new mining policy seeks to shorten the time it will take for new mining leases to be granted by state and federal governments to about six months to a year. At the moment it is often a long and tortuous process.

 

Once the new policy is in place shortly, applications for new mining leases will be automatically referred to a tribunal. This should make it easier for foreign and domestic firms to invest in the exploration and mining of gold, diamonds and metals like zinc and copper.

 

"Geo-politically we find India more safe than other regions and are looking to offer our services for exploration, marketing and branding," he said.

 

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In reply to: rocketrodo on Thursday 06/09/07 11:17am

Gold is building up steam now $830 AUD/oz.

 

Not too sure about Citigold, they appear to indicate that they can't make a buck with the current 10 million ounces so they need to drill to find some more...

 

 

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QUOTE (dayz @ Tuesday 18/09/07 07:25am)

Citigold's putative 50 million oz's of gold appears to be the target of the new exploration drive. This would compare quite well with BHP's 80 million at Olympic Dam.

 

Still, I would like to be kept informed of the current monthly production volumes - can CTO hit their own 40000 oz/year target ?

 

The companies silence on this is deafening http://www.sharescene.com/html/emoticons/thumbdown.gif They don't respond to emails.

 

Bring back the old Citigold newsletter I say !

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CTO is still a buy by my calculations.

 

Recently announced that they are targeting 250 k oz a year, expansion funded by production.

 

Profit per oz = 830-350 (gold price-cost of production) = 480 /oz

 

If they reach 250,000 ounces/year as predicted by CTO then.

 

Profit (millions) 250000*480/1000000 = $120 million/year

 

Current number of shares issued = 642 million

 

Earnings/share would be $120/642 = $ 0.19

 

on current share price ($0.42) the p/e ratio in 3-4 years time would be = 0.42/0.19 = 2.2

 

A reasonable p/e ratio perhaps is 10.

 

Therefore my projected share price in 3-4 years time = 0.42*10/2.2 = $1.91

 

If this took 5 years to achieve rather than 3-4 then

 

The increase in share price over the next 5 years would be ~35% per year.

 

$0.42*1.35*1.35*1.35*1.35*1.35 = $1.88

 

(If you know of another investment possibly returning 35% a year please tell me.)

 

 

Assumptions:

- that they get to 250 k oz a year without further dilution of shares.

- that the differential between cost and price realised per oz stays at $480 /oz

 

 

to quote from the annual report :

 

QUOTE
...subject to gold price and operating cost projections, further growth of gold production on the goldfield may be able to be funded from internally generated cash flow.
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