Citigold Corporation signs development deal with Chinese gold group
Gold producer Citigold Corporation (ASX: CTO, FSE: CHP) has signed a Memorandum of Understanding with Henan Jinqu Gold Company Limited (Jinqu), China, to form a joint venture company to develop the City mines of Citigold’s Charters Towers gold project in North Queensland.
The high-grade deposit is Australia's richest major goldfield and contains a gold resource of 10 million ozs (23 Mt @ 14 g/t) with exceptional growth potential. Gold output targets growing to 300,000 ozs per year with gold production cash costs under A$350 per oz.
Under the terms of the MOU Jinqu may acquire up to a 50% interest in the joint venture company which will own granted mining leases with permits to mine and associated infrastructure, containing a gold Mineral Resource of 1.8 million ounces.
Henan Jinqu Gold Company Limited’s main business is the exploration,
mining, processing and smeltering of gold. The company is also engaged
in research, development, production and sales of synthetic diamonds.
The company is a member of the Shanghai Gold Exchange.
The City
mining area is where Citigold carried out the initial exploration in the
1990’s after acquiring the first part of the Charters Towers goldfield.
Full control of the goldfield was obtained in 2004.
Citigold’s Gold Production Plan for the design and development work has been undertaken with the aim of producing 200,000 ounces per annum from the City mines. The City includes the major Sunburst, Brilliant and Day Dawn reefs to be developed together as one ‘super’ mine.
Citigold has internally budgeted that the development of the City operations should take 24 months and cost up to $70 million. The development of the City is to be separate from the 100% owned Warrior mine and the existing 340,000 tonne capacity gold processing plant.
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