PERTH (miningweekly.com) – ASX-listed Citigold Corporation has forward sold 100 00 oz of gold to GLD International, with the gold to be supplied within the next five years, subject to terms and conditions.
Citigold said on Friday that to incentivise GLD to pay for the gold at the earliest opportunity, the price would be at either 80% of the gold spot buy price at the time, or in limited circumstances, and at Citigold’s discretion, at 70% of the spot gold price.
Citigold would receive the cash as the gold ounces were purchased, and the more gold that GLD paid for prior to the end of June next year, Citigold would increase the rate of deliver with all gold paid for to be delivered within five years, being June 2022 at the latest.
Citigold told shareholders that the transaction with GLD would accelerate prepaid gold sales revenues that could be used to recommission the Charters Towers gold project, in Queensland, at the earliest opportunity.
Under the current mine plans for the Charters Towers operation, the 100 000 oz represented some 20% of the planned production over the first five years of operation.
Between now and June 2018, Citigold could potentially generate up to A$123-million in revenue, assuming an effective gold spot price of A$1 650/oz.
The sales agreement with GLD replaced an earlier offtake contract with Aaron Data Systems, which was signed in March this year, with Citigold telling shareholders that the agreement had been terminated owing to a lack of performance by Aaron.