>03may06
IT seems the pot of gold is finally in sight for Charters Towers' listed gold company Citigold and its shareholders.
The company's share price has exploded in recent days to hit highs of 46c - more than four times the 10c range it was last year - and trading volumes have surged from 400,000 up to 8 million a day.
The company's market value is now a healthy $240 million and with gold prices hitting a record $US660 ($880) an ounce this week, it is eyeing production of 40,000 ounces of gold a year worth about $35 million at today's values.
"The Warrior gold mine is scheduled to produce gold at the rate of 40,000 ounces per year with production scheduled to commence by the end of August," the company's March quarter report says.
"Funding is in place to accelerate operations, a second shift of staff has been employed on the Warrior decline ... and operations have increased to a six-day week in order to accelerate the rate of advance."
About $3 million has been spent developing a 477m-long tunnel for the Warrior mine about 4km south of Charters Towers and another $2 million is being spent extending it a further 470m to strike gold-bearing ore.
The company reported intersecting a cross-vein, the Sons of Freedom, along the Warrior decline and says that assays have returned rates of 40g per tonne of gold.
"Citigold is sourcing additional mine production equipment to enable a smooth transition to gold production activities and will be recommissioning the existing gold processing plant in preparation to receive the high grade Warrior ore," the report says.
"Citigold is having no difficulty in attracting quality mining staff from the local mining workforce."
Citigold chief operating officer Chris Towsey said yesterday he did not know what had caused the share price spike although its latest report, a record gold price and recent media coverage had been encouraging.
The Bulletin's David Haselhurst had suggested in an April 18 article that Citigold was grossly undervalued and compared it with Bendigo Mining which had a similar resource and a market capitalisation of $986 million.
Mr Towsey said there was light at the end of the tunnel for Citigold and potential to grow the company to a 250,000 ounce a year operation employing 220 people.
However, first it needed to start producing gold - its first since 2000.
"It's finally coming together," Mr Towsey said.
"It's been a long, hard process.
"We have had a lot of support from Charters Towers and Townsville business people and our suppliers have stuck with us when the going got tough and we are very appreciative of that.
"We have very faithful shareholders and they are now being rewarded for it."
