0808 citigold annual report - kitco · historically mined brilliant day dawn lode that averaged 38...

ANNUALREPORT2 0 0 8

ii CITIGOLD CORPORATION LIMITED AND CONTROLLED ENTITIESFinancial Report for the year ended 30 June 2008

CONTENTSBusiness Overview 1

Chairman’s Letter 2

Review Of Operations 3

Directors’ Report 9

Auditors’ Independence Declaration 18

Corporate Governance 19

Financial Statements 23

Consolidated income statement 24

Consolidated balance sheet 25

Consolidated statement of changes in equity 26

Consolidated cash fl ow statement 27

Notes To The Financial Statements 28

Directors’ Declaration 58

Independent Auditor’s Report 59

ASX Additional Information 61

CORPORATE DIRECTORY

Corporate and Registered Offi ceLevel 15, IBM Centre,348 Edward Street,Brisbane, 4000 Qld, AustraliaTelephone: +61 7 3834 0000Facsimile: +61 7 3834 0011Email: [email protected]

Charters Towers Mine SiteClermont Highway, PO Box 10,Charters Towers, Qld, 4820, AustraliaTelephone: +61 7 4787 8300Facsimile: +61 7 4787 8600Email: [email protected]

International Offi ceGold & Diamond ParkSheikh Zayed Road, PO Box 38148Dubai, UAETelephone: +971 4 340 4588Facsimile: +971 4 340 7768Email: [email protected]

DirectorsJohn J Foley (Chairman)Mark J Lynch (Managing Director)Terence V Willsteed (Director)

Company SecretaryMatthew Martin

Exchange ListingAustralia (ASX) Code ‘CTO’Dubai DIFX (DIFX) Code ‘CTO’

Other Trading PlatformsAmerica ADR’s Code ‘CTOHY’Germany FSE Code ‘CHP’

Share RegistryComputershare Investor ServicesLevel 27, 345 Queen Street,Brisbane Qld 4000Telephone: 1300 552 270

AuditorBDO KendallsLevel 19, 2 Market St,Sydney NSW 2000

BankHSBC

www.citigold.com

F R O N T C O V E R I M A G E :

O R E S A M P L EMINED OUT OF WARRIOR ASSAYED

8 30 G/ T( 2 7 O Z / T O N N E )

1 CITIGOLD CORPORATION LIMITED AND CONTROLLED ENTITIES Financial Report for the year ended 30 June 2008

BUSINESS OVERVIEWCitigold Corporation Ltd (Citigold) is a growing Australian gold mining and exploration company producing gold from Australia’s richest goldfi eld at Charters Towers in north east Australia, 1000 kilometres north of Brisbane, Queensland.

Citigold listed on the Australian Securities Exchange (ASX) in 1993 and, as a part of its international strategy, listed on the Dubai DIFX stock exchange in 2007. Citigold shares are quoted on the Frankfurt Stock Exchange (FSE) and Citigold has an ADR program in the U.S.A.

Citigold holds 100% of the high grade Charters Towers goldfi eld where a Mineral Resource of 10,000,000 ounces of gold (331 tonnes) at an average grade of 14 g/t gold, to JORC reporting standards, has been defi ned and documented. This gold deposit is currently the largest high grade gold resource in Australia.

The Company has invested over $120 million to develop the goldfi eld, has commenced commercially extracting gold and plans to build up gold production from its underground mines in stages towards 300,000 ounces annually with a life of over 20 years. We are developing a large gold project requiring time and commitment.

Unlocking the enormous value of the gold assets at Charters Towers for the benefi t of shareholders is a key focus of Citigold’s strategic plan. We have assembled a core team of leading mining professionals technically and practically skilled in the Company’s type of geology and mining operations. We are striving to be the best at what we do.

The Company has commenced an extensive drilling program on the major east-west multi-kilometre long parallel reef

lines using several diamond core rigs. The goal is to establish that the fi eld is a 50 million ounce gold giant. All the indicators are there but we have to do the work to prove it.

Citigold’s mission is to effi ciently expand gold production targeting a 50% cash surplus on gold revenues through mechanised mining of the high grade reefs. Citigold’s deposits at Charters Towers will be developed through several inter-related and adjacent mines feeding a common gold extraction plant. The Charters Towers Warrior mine is the fi rst in operation, and now producing gold.

Citigold’s gold is shipped to Australian Gold Refi neries where it is processed and sold into global markets.

SHAREHOLDERS WELCOME AT MINE Shareholders are always welcome to visit the mining operations at Charters Towers by prior arrangement. Please contact the Brisbane offi ce to co-ordinate your visit to the mine site.

GROWTHBUILT ON

GOLD

Illustration of the Charters Towers gold deposit.

Dear Shareholder,

The 2008 fi nancial year saw the fi rst full year of successful continuous gold production from the Charters Towers Warrior mine.

The gold production coincided with the US gold price rising from around US$648 per ounce in July 2007 to peak at US$1037 per ounce before receding slightly to US$925 per ounce in June 2008. The Australian dollar exchange rate appreciated to almost parity with the US dollar for part of the year and resulted in an average gold sale price to your Company of A$917 per ounce and a production cash cost averaging A$495 per ounce.

In the turbulent international fi nancial markets gold is returning to its role of a safe place to invest in times of geo-political tensions and a diminished outlook for the US$. Gold is ‘Rare’ – it is amazing, but the total amount of gold in the world is a surprisingly small quantity. It has been stated that if all the available gold produced in the world was stacked up as gold bars rising up to 20 metres in height, the area it would cover would be about a tennis court.

Mining at Warrior is continuing with the development of a new Western Decline to open up a further 1,000 metres along the reef and to give rapid access to new areas for mining and increase gold output by increasing the areas that can be worked simultaneously. The investment at Charters Towers has so far created 108 jobs in Queensland at June 30 2008, an increase of 32% over last year.

The Warrior structure appears from aerial magnetic geophysics to continue for a further kilometre to the east, taking the total strike length to three kilometres and a new large mining lease has been taken out to cover this area. Subject to successful drilling it is expected that an Eastern Decline will be commenced this coming year.

Exploration is continuing on our surrounding Exploration Permits to defi ne new areas of mineralisation. Your Company now owns fi ve drill rigs and is actively drilling, with over 21 kilometres of diamond core drilled in 110 holes. Over $4 million was spent during the year on exploration and drilling.

At the time of writing the Deep Hole was at 1,400 metres and on the way towards 2,000 metres. This is a signifi cant exploration initiative that we all follow with interest looking for the deep extensions of the high grade gold mineralisation.

I would like to express my appreciation for the encouraging support we enjoyed from the Charters Towers Regional community. The mine, with operations within the City limits, has a close and mutually benefi cial relationship that is not available with the more usual remote fl y in fl y out operations. We look to add to the prosperity of the region as we grow.

This excellent progress is only possible through the dedicated efforts of our staff and the continued support from our suppliers and shareholders. I express my sincere thanks and gratitude to all groups for their effort and support, and I look forward to a rapid increase in gold production and the value of shareholders’ investment.

John J FoleyChairmanCitigold Corporation Limited

CHAIRMAN’S LETTER

John FoleyChairman

Mark LynchManaging Director

Matthew MartinChief Financial Offi cer& Company Secretary

Terence WillsteedDirector

2 CITIGOLD CORPORATION LIMITED AND CONTROLLED ENTITIESFinancial Report for the year ended 30 June 2008


REVIEW OF OPERATIONS

HIGHLIGHTS FOR THE YEAR INCLUDE:• 10 million ounce gold resource with potential to increase.• Gold produced from underground was 17,497 ounces

and gold sold trebled to 13,784 ounces. • Average cash production cost per ounce of gold was

A$495 per ounce.• Average gold sale price received was A$917 per ounce.• Company remains free of secured debt and gold sales

are unhedged.• Revenue quadrupled to over A$12 million• Full time employees increased by 32% to 108.• Underground mine development increased to

2,600 metres.• Core drilling trebled to 21,580 metres for 110 holes.• High grade drill intersections continue.• Deep 2,000 metre long drill hole commenced.

OUTLOOKThe good work carried out in 2008 has left Citigold well placed for 2009 and beyond. As an unhedged gold producer the Company is positioned to reap the benefi ts of a strong gold price.

As gold production grows forward estimates show that the cash cost of gold production should decrease towards A$350 per ounce due to economies of scale and effi ciencies to be added to the extraction and processing of ore over the coming year.

A capital raising announced in September 2008 will have a positive impact on Citigold’s future whereby the Dubai Group has commenced investing up to $35 million to acquire an 18% interest in Citigold. This will underpin the expansion of the Charters Towers gold mining operations, lift gold production, substantially boost future cash fl ows and improve fi nancial fl exibility for ongoing investment in the expansion of gold production.

The Warrior lode to date is performing similarly to the historically mined Brilliant Day Dawn lode that averaged 38 g/t gold. With the recent electric power upgrade, move to 24 hour operation, equipment upgrades and major funding in place we can now accelerate expansion of the underground mining areas to signifi cantly increase gold

output. The focus in the short term will remain on the current Warrior reef area growing output towards 100,000 ozs year before expanding onto the Sunburst reef.

The fi nancial year has seen the fi nancial performance improve substantially with a loss of only $2.4 million in 2008 down from $7.2 million in 2007. Operating costs of A$495 have confi rmed that gold can be mined profi tably and as gold production grows we are expecting group profi tability in 2009 and beyond.

It is expected that ongoing growth in gold production in future years will then be funded internally without the need for further external funding.

MINING OPERATIONSAlthough production growth has been slower than planned, the conservative development approach to build the business ensures capital effi ciencies. With vertical mining depth now below 200 metres depth the mine is ready to accelerate the more effi cient horizontal expansion that will see more working areas opened up for ore extraction.

Over the period the Charters Towers Warrior operations continued to ramp up gold production in parallel with mine development.

Underground mining over the past year provided gold production and enabled detailed sampling of the Warrior lode.

Warrior Gold ResourceThe Warrior mining area represents only a part of the overall Charters Towers 10 million ounce gold deposit.

Garry Foord – General Manager Mining, Sara Warren – Senior Geologist and Chris Towsey – Chief Operating Offi cer


REVIEW OF OPERATIONS CONTINUED

Mining has commenced on the eastern side of the Warrior reefs east-west strike line. The deposit has an overall length of 2 kilometres. The Inferred Mineral Resource for Warrior deposit is 1.9 million tonnes at 14 g/t Au containing 840,000 ounces of gold (rounded to 2 signifi cant fi gures) (see Table 8 on Page 59 of the Report on the Inferred Mineral Resources for the Charters Towers Gold Project May 2005). Within the overall resource head grades and widths of the specifi c mining areas are expected to vary.

Underground DevelopmentDevelopment metres in the underground operation including the decline, cross-cuts, level drives and loading bays totalled 2,600 metres for the year and gold produced from underground was 17,497 ounces of gold. A large part of the development was capital development for underground infrastructure including long term haulage roads.

Development early in the year focused on extending the 830, 820 and 805 ore levels while continuing the internal decline to the 790 Level. By the end of the year, the Main Decline advanced down to the 727 level (the surface is 960 Level), and work had commenced on the Western Decline from its junction with the Main Decline at the 730 Level.

The internal ventilation shaft and second exit from the mine was extended from the 850 level down to the 790 level at the beginning of the year. A Return Air Raise was completed extending the ventilation link that connects through to the surface, down to the 745 Level. An additional mobile Refuge Bay was installed near the 745 level as a safe haven for workers in that area of the mine in case of emergency.

Ore ProductionUnderground mining of the ore body has confi rmed –

• Gold resource model is accurate• Gold reserve model is accurate and reliable• High-grade reefs show their expected geological

continuity

Ore stoping during the year was from the 840, 830, 820, 805, 790 and 745 Levels. The underground operated effectively on a 5 day a week basis mining some 35,308 tonnes (56%) of ore from stopes and 27,976 tonnes (44%) from ore accessed in the development levels, totalling 63,284 tonnes of ore grading 9 g/t Au after planned dilution. Stoped ore grades averaged 11.7 g/t. In addition some 114,432 tonnes of development rock was mined from

the decline and other access areas.

Also of signifi cance is that microscope studies of the very high grade ore, sampled from the mining

face, by Professor Roger Taylor of James Cook University shows that the gold is

not ‘nuggetty’ (very large pieces) but rather the very high grades

are based on local concentrations of a large number of very small particles of fi ne gold. For example, in one ore sample from underground, grading over 300 g/t, there were 555 particles of gold in less than 1 mm of ore. This information supports the long held belief of the senior geological staff that Citigold can quantify the gold distribution by drilling.

Mineral ProcessingGold recovery in the processing plant averaged just under 98%, improving on the earlier conservative assumptions of 95% made in the Company’s studies and ore reserve estimation stages. Milling was interrupted on two occasions by problems with the grinding mill electric motor. A spare motor has been ordered as a critical spare to minimize any future interruptions.

Strengthening Local ManagementThe appointment of Mr Garry Foord to the position of General Manager Mining of the underground gold operations greatly strengthens the technical and operational planning leadership on site to help drive the acceleration in gold production. Mr Foord is a qualifi ed First Class Mine Manager and has over 30 years experience as a mining engineer developing and coordinating mining and exploration projects. Mr Foord headed the mine design team and implemented the successful slot stoping mining method currently in use at the Warrior mine.

Electric Power Upgrade CompletedA major upgrade to the underground electric power supply was completed by the State grid provider in August 2008 and has more than quadrupled the power supply to the Warrior underground site to 3 MW. This delayed upgrade greatly hindered mine output during the 2007/08 fi nancial year. The upgrade will mean more of the mining activities can be operated simultaneously which will assist in ramping up mine output.

Mechanised MiningThe mechanised long hole slot mining method used at Charters Towers by Citigold’s mining crews is performing effectively and effi ciently. Citigold’s senior mine design and geological staff planned the long hole mining method based on the fact that the gold quartz ore bodies are geologically separate from the surrounding country rock. This results in the ore breaking clean after blasting and minimal unplanned dilution.

The progressive upgrade of old mining equipment to new mining gear, and expansion of the fl eet, continued during the year with the arrival of the Atlas Copco 1520 (15 tonne capacity LHD loader), an MT 5010 haulage truck, new H104 single boom blast hole rig, two U8 Diamond Drill rigs and one U6 diamond drill. The equipment being acquired is aimed at achieving optimal productivity for Citigold’s particular mining needs.

The introduction of 24 hour 7 days per week operations in August 2008 provided a 40% increase in the available working hours per week. This increase in working hours was only made possible by the purchasing of new mining gear, ensuring less down time, and the increase in underground staff.

Western DeclineTo date the mine has been principally developed vertically with only limited horizontal development to ensure mine access, at depth, was advanced. The east-west striking gold reefs at Charters Towers are well understood due to the amount of historical data generated through the past mining of over 6 million ounces of gold, on adjacent reefs, and the subsequent recent drilling. The high grade reefs are sub-outcrops (do not come to the surface) and broaden with depth. Previously below 200 metres depth the reefs averaged a high of 5,000 ounces per vertical metre. Horizontal development is lower cost than vertical development, but fi rst it was essential to get the depth.

The Western decline (5 metres x 5 metres @ 1:7 gradient) development at Charters Towers Warrior mine will progressively open up the reef for mining and ore extraction along a one kilometre area. The initial aim is to have at least fi ve separate ore extraction areas in operation at all times growing to ten at full production at the Warrior mine.

Effi ciency InitiativesOver the next twelve months Citigold plans to implement four cost reduction effi ciency programs:

1. Photometric ore sorting underground – this will help to reduce costs and increase effi ciencies at both the underground and production plant by removing waste rock, at the source, from the underground ensuring reduced tonnes are transported to the surface thereby increasing the head grade of ore going to the process plant and reducing haulage and mining costs.

2. Upgrade of the gravity circuit – External studies have estimated up to 50% of the gold contained in the ore at Charters Towers can be extracted by gravity processing.

This upgrade will result in Citigold’s process plant having a larger capacity and more effi cient gravity circuit ensuring that more of the high grade gold is recovered earlier in the process fl ow chart, hence lower the processing cost per ounce.

3. Digital underground wireless voice and data communication system network – this will create a network throughout the underground operations that will enable management to locate machines and staff underground. This will assist management to ensure the underground is operating at maximum effi ciency as well as assisting Citigold to maintain its good safety record.

4. Down hole geophysical detection of very high grade gold zones – the current drilling is consistent with the expected payability of 30% along the strike length of the reef structures. During the year testing was commenced to assess if geophysical techniques using radar imaging from boreholes and electromagnetic methods could be used to improve effi ciencies in drilling and increase the number of holes that intersect high grade ore. The very high-grade ore areas (hot spots) seem to have a ‘core’ of massive sulphides that geophysical techniques can target. To date the results have been very encouraging. Citigold’s technical team plan to conclude the test work in late 2008 and implement the required techniques in early 2009.

MINERAL RESOURCES AND ORE RESERVESCitigold Mineral Resources and Ore Reserves for the overall Charters Towers Gold Project are reported in accordance with the Australasian JORC Reporting Code. As at 30 June 2008 the Resources and Reserves are tabled below:

Full details are contained in the “Report on the Inferred Mineral Resources for the Charters Towers Gold Project May 2005” and the “Report on the Indicated Mineral Resources and Probable Ore Reserves for the Charters Towers Gold Project, August 2005” which can be found on the Citigold web site at www.citigold.com (click on “Reports” then

“Technical Reports”).

CATEGORY TONNES GRADEg/t Au

CUT OFF CONTAINED OUNCES

Inferred Mineral Resources 23,000,000 14 3 metre-gramsper tonne

10,000,000

Indicated Mineral Resources(includes Probable Ore Reserve)

740,000 15 7 g/t Au 370,000

Probable Ore Reserves (contained within Indicated Mineral Resource)

800,000 13 7 g/t Au 330,000

CITIGOLD CORPORATION LIMITED AND ONTROLLED ENTITIES Financial Report for the year ended 30 June 2008

5



The following statements apply in respect of the information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves: The information is based on, and accurately refl ects, information compiled by Mr Christopher Alan John Towsey, who is a Corporate Member and Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Towsey is a geologist and employed by CTO as Chief Operating Offi cer. He has the relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defi ned in the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Identifi ed Mineral Resources and Ore Reserves. Mr Towsey has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears.

EXPLORATIONCore Drilling ProgramCitigold acquired additional computerised diamond-core drill rigs during the year, taking the total to fi ve rigs, three U8s and two slightly smaller U6s. Diamond-core drilling trebled to 21,580 metres (6,033m last year) in the last fi nancial year with 110 holes completed (24 last year). The 110 holes completed during the year confi rmed the payability of 30% with approximately 33 signifi cant intersections, although 99% of holes intersected the structure as planned. For the full list of intersections please visit Citigold’s website at www.citigold.com

Deep Drill HoleThe deep drill hole targeting a 2,000 m length to test for deep extensions of known structures commenced in late June and by 11 September it was at 1,122 metres. Weekly updates are being uploaded to Citigold’s website at www.citigold.com. The hole is located on the north-eastern side of the City, near the Racecourse, and dips steeply to the south-south-west. The deep hole may test an area that

could assist in explaining the feed source that has supplied the high grade gold into the 5 major known east west reefs and associated cross reefs.

The Government of Queensland, acting through the Department of Mines and Energy (DME), is supporting the drilling of this deep hole, the deepest gold exploration hole ever drilled at Charters Towers.

The main targets are below 1,400 metres. A gold-mineralised structure was intersected at a down hole width of 1.75 metres wide and at approximately 560 metres depth. The structure appears to be related to the St Patrick’s lode. If the intersection is on the St Patrick’s lode it is the deepest drill intersection to date on this structure, located some 1000 metres down dip from the bottom of the old workings on the lode. It would also extend the strike extent by 1500 metres.

Regional ExplorationOther regional exploration programs included ground geophysical surveys geological mapping, stream sediment, soil, and rock sampling on EPM 15964. This work aims to delineate new drill targets outside the existing 10 million ounce resource zone.

Locally soil sampling was also conducted in the area west of Warrior mining area and on a reef structure about 300 metres south of the major Warrior east west reef. This southern reef has had past mining and this work aims to delineate new drill targets.

Additional Mineral TenureA new 293 hectare underground Mining Lease was applied for in 2008, over ground already controlled by Citigold under exploration tenure. The new mining lease will cover a 1.5 kilometre eastern extension of the Warrior reef for future mining. Citigold currently has mining leases covering the Charters Towers Warrior reef for 2 kilometres to the west where mining is planned over the coming years.


Gateway MiningCitigold has a 16% shareholding investment in the Australian focused ASX listed exploration company Gateway Mining Limited. Gateway has several advanced exploration projects in Western Australia, New South Wales and Queensland. Their projects are for gold and base metals that are being explored by the company and through joint ventures. Gateway has continued to focus on their prime exploration projects. Citigold looks forward to gains from Gateway’s future exploration success.

SAFETY, HEALTH AND ENVIRONMENTThe Company’s policy is stated as:

“Citigold Corporation Limited explores for and produces gold profi tably and sustainably without harming its employees, the community or the environment.”

The annual safety, health and environmental audit was undertaken in mid December 2007 by external contractors as part of Citigold’s policy of regular auditing of its safety, health and environmental risk management system in a similar manner to fi nancial management system audits.

During the year there were 2 Lost Time Injuries during the year, both were minor, unrelated to underground operations and only involved two days lost time.

There were no health issues or reportable environmental incidents during the year.

Community RelationsThe Company supports local communities with personnel, labour and donations to a wide range of community activities that have included local rodeo associations and entrants, All Soul’s School, Lions Club, Over 60’s, National Aborigines and Islanders Day Observance Committee parade and the Combined Mines Charity Ball. As operations expand Citigold will continue to support and work in harmony with the local community.

EnvironmentalToday there are two main sectors of environmental consideration – the natural environment and the people

environment. Citigold’s mining and processing operations have been established in a way that strives to have minimal impact on the natural environment of the Charters Towers region.

Similarly working within a community of 8,500 residents presents a unique challenge. The Company’s staff at Charters Towers works hard to create the maximum benefi t, and minimal disturbance, within the community though consultation, employment and involvement of local businesses. Many of Citigold’s staff are long time residents of Charters Towers and therefore have a genuine commitment to their home town.

Jim Morrison, General Manager Exploration, inspecting drill core at Citigold’s core yard


CORPORATEThe fi nancial markets went through a very volatile period during calendar 2008 with most world stock exchanges experiencing major declines in indices. Citigold was not immune to these declines. With the gold price holding long term support during the period, Citigold’s foundations remain strong and management looks towards 2009 to grow shareholder value through the growth in operations and gold output.

The Company’s strategic plan to further enhance shareholder value includes:

1. boosting gold production to expand cash fl ow and generate profi ts; and

2. expanding the gold resources and reserves, thereby increasing the value of the gold asset.

During the year the Company announced that certain executives of the Company had been invited to participate in the Executive Option Plan to provide a retention and performance framework. This Plan provides for the staged granting of Options to acquire shares at 50 cents per share. The current market conditions mean that management will be strongly motivated to ensure the Company achieves its targeted growth in production effi ciently to ensure value is put into these Options and a rising share price would benefi t all shareholders.

Citigold pays a royalty to the Australian Gold Trust participants of 1.4% on the fi rst 40,000 ounces produced from the Warrior mining lease.

In March 2008 the Company announced that the shares in Citigold were now quoted on the Frankfurt Stock Exchange (FSE) under the trading symbol ‘CHP’. The Frankfurt exchange is the largest in the Euro zone. This listing will give the Company an opportunity to increase its European shareholder base.

The Brisbane Corporate offi ce lease ended after 6 years at Milton, on the edge of the City, and a decision was made to relocate. The new offi ce is a similar size and is located closer to the City and public transport hubs, at Level 15, IBM Centre, 348 Edward Street, Brisbane, Queensland.



The directors present their report together with the fi nancial report of Citigold Corporation Limited and the consolidated fi nancial report of the consolidated entity for the year ended 30 June 2008 and the auditor’s report therein.

1. DIRECTORSThe names and the relevant details of Directors of the Company in offi ce during or since the end of the fi nancial year are as follows.

Current DirectorsName and qualifi cations

Experience Special Responsibilities

J J FoleyBD, LLB, BL (Dub)

Appointed02/07/1993

Graduating in law from the University of Sydney in 1969, Mr Foley was admitted to practise as a barrister in New South Wales in 1971. He was called to the Irish Bar in 1989 and admitted as a Member of the Honourable Society of Kings’ Inns in Dublin. Mr Foley has over 30 years’ experience in the gold mining industry, has been a guest speaker at the World Gold Council in New York and is a past Director of the Australian Gold Council.

Non-Executive, Member of Audit and Finance, Remuneration and Health, Safety and Environment Committees.

M J LynchFAICD

Appointed02/07/1993

Actively involved in gold exploration and mining for over 28 years. During his career, he has blended his knowledge of economics and science into his specialist skills of strategic planning and innovation. Mr Lynch has extensive hands-on experience in mine management and mining tenure administration, held the position of Director of the Queensland Resources Council for six years. He is currently a Fellow of the Australian Institute of Company Directors and is the driving force behind the company’s strategic vision to focus on growing the gold business in a way that adds value for shareholders.

Managing Director Member of Health, Safety and Environment committee.

T V WillsteedBE(Mining) Hons, BA, FAIMM, MSME, MAICD

Appointed21/10/2006

Mining Engineer with a career spanning over 46 years in mining operations, minerals processing, corporate management and consulting. Fellow of Australasian Institute of Mining and Metallurgy. He is also a BA graduate and a registered member of the leading Society of Mining Engineers (SME) in the USA. As the principal of consulting mining engineers Terence Willsteed and Associates, he has extensive experience in the assessment and development of a wide range of mineral projects. His career in the mining industry has included senior line operational and engineering positions with Zinc Corporation, Mt Isa Mines Ltd and Consolidated Goldfi elds Ltd. Mr Terence Willsteed has expertise in managing mineral projects, both within Australia and internationally. Over the past three years has acted as a non-executive director of other Australian listed public companies as follows: Climax Mining Limited (resigned 2007); Austral Gold NL (resigned 2007); European Gas Limited (current since November 2002); Goldsearch Limited (current since July 2004) and an LSE listed company; International Ferro Metals Limited (current since September 2005)

Non-Executive Director Chairman of Audit and Finance, Remuneration and Health, Safety and Environment committees.

DIRECTORS’ REPORT


DIRECTORS’ REPORT CONTINUED

Company Secretary Mr Matthew Martin B.Com, CA

Mr Martin has worked in various roles as part of several global teams, including international banking capital raisings and accrued skills in most aspects of corporate fi nance and accounting. He has strong skills in systems compliance, multinational fi nancial statements, forecasting, reporting and analysis. In his previous employment he acted as Company Secretary for client companies. He joined the company in December 2005 as corporate accountant. He was appointed Company Secretary in April 2006 and Chief Financial Offi cer in July 2007.

Meetings of DirectorsThe number of directors’ meetings (including board committees) held and the number of meetings attended by each director during the year ended 30 June 2008 was:

Board Meeting Audit and Finance Health, Safety and Environment **

Remuneration

Held Attended Held Attended Held Attended Held AttendedJ J Foley 16 16 2 2 ** ** 1 1M J Lynch 16 16 * * ** ** * *T V Willsteed 16 16 2 2 ** ** 1 1

* Not a member of the relevant committee** Health, Safety and Environment issues are reviewed and mine reports considered by Directors at each Board meeting.

Directors’ interestsThe relevant interest of each director in the shares and options issued by the companies within the consolidated entity and other related bodies corporate, as notifi ed by the directors to the Australian Securities Exchange in accordance with s205G (1) of the Corporations Act, at the 30 June 2008 is detailed in the following table.

Director Ordinary shares Share OptionsJ J Foley 4,599,374 3,000,000M J Lynch 86,801,803 10,000,000T V Willsteed Nil 750,000

Remuneration of directors and senior managementInformation about the remuneration of the directors and senior management is set out in the Remuneration Report of the Directors’ Report.

Share options granted to directors and senior managementDuring and since the end of the fi nancial year, 5 million options over fully paid ordinary shares were granted to senior management team as part of their remuneration:

Directors and Senior Management

Number of options granted

Issuing entity Number of shares under option

C. Towsey 1,000,000 Citigold Corporation Limited 1,000,000M. Martin 1,000,000 Citigold Corporation Limited 1,000,000G. Foord 1,000,000 Citigold Corporation Limited 1,000,000J. Morrison 1,000,000 Citigold Corporation Limited 1,000,000J. Lynch 1,000,000 Citigold Corporation Limited 1,000,000

2. PRINCIPAL ACTIVITIESDuring the year the principal activities of the consolidated entity consisted of production, development and exploration of the Charters Towers goldfi eld. There has been no signifi cant change in the nature of these activities during the year.


3. DIVIDENDS – CITIGOLD CORPORATION LIMITEDNo amount has been paid or declared by way of dividend by the Company during the year. The directors do not recommend a dividend at this time.

4. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRSSignifi cant changes in the state of affairs on the consolidated entity during the fi nancial year were as follows:

(a) Ordinary SharesAn increase in ordinary shares in the Company from 641,902,700 to 678,644,974 as a result of:

Type of Issue Issue Price Number of shares Issued

Exercise of options $0.15 25,000 Exercise of options $0.32 80,468 Exercise of options $0.37 27,000 Share Purchase Plan $0.39 19,197,091 Share Purchase Plan $ - 959,855 Share placement $0.45 1,222,222 Exercise of options $0.15 119,150 Exercise of options $0.15 1,776,667 Exercise of options $0.32 31,250 Share placement $0.28 13,303,571

Net cash received was used to continue the exploration, development and general activities of the Company.See Note 18 of the Financial Statements.

(b) Revaluation of assetsThe Non Current Assets of Citigold Corporation were reviewed by independent consulting mining engineers. The Property Plant and Equipment of the Company was valued as at 30 June 2008. The value of the mining tenements has now been upgraded resulting in an increase in the overall value of the Charters Towers Gold Project to $209 million.

5. SHARE OPTIONSDetails of unissued shares or interest under options as at the date of this report are:

Issuing Entity Number of options Exercise Price Expiry date of Option

Citigold Corporation Limited 4,761,220 $0.32 20-Jul-08Citigold Corporation Limited 6,296,917 $0.37 19-Sep-08Citigold Corporation Limited 122,222 $0.45 20-Nov-09Citigold Corporation Limited 5,625,000 $0.50 27-Nov-09Citigold Corporation Limited 1,330,357 $0.37 14-May-10Citigold Corporation Limited 6,562,500 $0.50 10-Apr-11Citigold Corporation Limited 6,562,500 $0.50 27-Nov-11

Details of option exercised during the fi nancial year:

Date Details Option exercised Amount paid Amount unpaid

23-Aug-07 Fully paid ordinary shares 25,000 $ 3,750 $ -23-Aug-07 Fully paid ordinary shares 80,468 $ 25,750 $ -23-Aug-07 Fully paid ordinary shares 27,000 $ 9,990 $ -27-Nov-07 Fully paid ordinary shares 119,150 $ 17,873 $ -17-Mar-08 Fully paid ordinary shares 1,776,667 $ 266,500 $ -17-Mar-08 Fully paid ordinary shares 31,250 $ 10,000 $ -



6. POST BALANCE DATE EVENTSOn 24 September 2008 the Company announced the placement of up to 18% of the outstanding shares to the Dubai Group for $35 million. For the full disclosure please visit Citigold’s website at www.citigold.com. No other matters or circumstances have arisen since the end of the fi nancial year which signifi cantly affect or may signifi cantly affect the Company’s operations, the result of those operations or the state of affairs in subsequent fi nancial years.

7. REVIEW OF OPERATIONSA review of the consolidated entity’s operations during the year and the results of these operations are disclosed in pages 3 to 7 of the Annual Report.

8. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONSLikely developments in the operations of the consolidated entity are:

(a) the continuation of exploration activity aimed at increasing resources and reserves,(b) the continuation of mining activity at Charters Towers.

Additional comments on expected results are included in the Review of Operations.

9. INDEMNIFICATION AND INSURANCEDuring the fi nancial year the Company paid premiums to insure all Directors and Offi cers of the Company against claims brought against the individual while performing services for the Company and against expenses relating thereto, other than conduct involving a wilful breach of duty in relation to the Company. Under the terms and conditions of the insurance contract, the nature of liabilities insured against and the premium paid cannot be disclosed.

The Company has not otherwise, save as enshrined in the Company’s constitution, during or since the end of the fi nancial year, in respect of any person who is or has been an offi cer of the Company:

(a) indemnifi ed or made any relevant agreement for indemnifying against a liability, including costs and expenses in successfully defending legal proceedings; or

(b) paid or agreed to pay a premium in respect of a contract insuring against a liability from the costs or expenses to defend legal proceedings.

10. PROCEEDINGS ON BEHALF OF THE COMPANYNo person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings

11. ENVIRONMENTAL REGULATIONSEntities in the consolidated entity are subject to signifi cant environmental regulation in respect to its exploration and mining activities in gold.

The organisation has developed criteria to determine areas of ‘particular’ or ‘signifi cant’ importance, with regard to environmental performance. These are graded 1 to 4 in terms of priority.

Level 1 incident – major non compliance with regulatory requirements resulting in potential political outcry and signifi cant environmental damage of both a long and short term nature.Level 2 incident – signifi cant non compliance resulting in regulatory action, however, environmental damage is only of a short term nature.Level 3 incident – minor non compliance – no fi ne is imposed, however, regulatory authority is notifi ed.Level 4 incident – non compliance with internal policies and procedures. The incident is contained on site.

In the last year the following incidents have occurred.

Level 1 Level 2 Level 3 Level 4

Incidents - - - -

The Company has an internal reporting and monitoring system with regard to environmental management on the site. The Company employs an environmental offi cer to monitor all water quality, noise and air quality issues as well as liaise with the community on activities that may impact on the local area.


12. AUDIT/NON-AUDIT SERVICES AND AUDITOR INDEPENDENCEThe fees paid or payable for services provided by the auditor of the Company are set out in Note 6 of the Financial Statements.

The Auditor’s independence declaration is included on page 18.

13. REMUNERATION REPORT – AUDITED 1) Director and Senior Management DetailsThe following persons were Directors and/or key management personnel of the Group:

J.J. Foley (Non Executive Chairman)M.J. Lynch (Managing Director/Chief Executive Offi cer)T.V. Willsteed (Non Executive Director)M.B. Martin (Company Secretary/Chief Financial Offi cer)C.A.J. Towsey (Chief Operating Offi cer)G. Foord (General Manager – Mining)J.F. Lynch (Site Senior Executive)R.J. Morrison (Exploration Manager)

There are no other group or company executives.

2) Remuneration PolicyThe Remuneration Committee, consisting of two non-executive directors, advises the Board on remuneration policies and practices generally. The Committee can make recommendations on remuneration packages and other terms of employment for executive directors, non-executive directors and senior executives.

Executive remuneration and other terms of employment are reviewed by the Committee when necessary having regard to performance, relevant comparative information and independent expert advice. As well as a base salary, remuneration packages include superannuation and use of motor vehicles.

During the year a performance aspect of executive remuneration was implemented via the issue of share options through the option plan. This will help to align executives’ goals with that of the shareholders. The share price over the last fi ve years has increased by over 100% and production has grown over the last 2 years by 300%.

Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the consolidated entity’s operations.

The Board, within the maximum amount approved by shareholders from time to time, determines remuneration of non-executive directors. The fees have been determined by the Board having regard to industry practice and the need to obtain appropriately qualifi ed persons. Non-executive directors are also entitled to statutory superannuation.



3) Payments to specifi ed Directors and Key Management Personnel for the year ended 30 June 2008

2008

Short-term employee benefi ts Post-employment

benefi ts

Share-based

payments

Total Proportion of remuneration

that is performance

basedCash salary and

fees

Non-monetary benefi ts

Related party

Payments³

Superannuation Options²

Directors $ $ $ $ $ $ %J J Foley 63,846 13,254 122,493 1,019 - 200,612 -M J Lynch¹ 378,9914 - - - - 378,991 -T V Willsteed - - 40,000 - - 40,000 -Other Key Management PersonnelC A J Towsey 177,740 29,692 43,337 26,860 99,210 376,839 26J F Lynch 207,360 30,067 - 17,717 99,211 354,355 28R J Morrison 171,489 5,391 12,072 15,434 99,211 303,597 33G Foord 114,535 21,175 52,756 19,144 99,211 306,821 32M B Martin 152,453 42,972 45,452 13,721 99,211 353,809 28

1,266,414 142,551 316,110 93,895 496,054 2,315,024 -1 During the year ended 30 June 2008 M Lynch was based in the U.A.E. 2 The amount relates to the share based payment expense charged for options granted to Senior Executives in this Financial Year. Fair values

of options are determined using Black Scholes options pricing model that takes into account the exercise price, the term of the option, the expected dividend yield, the risk free interest rate for the term of the option and the expected volatility of the underlying share. No money or shares actually passed to the Directors and these Share Based Payment amounts are estimations of a benefi t received but the stated benefi t may or may not be actually realised at a future date.

3 The related party payments are payments to entities related to the Directors and/or Key Management Personnel for work carried out by that entity or the hire of equipment owned by that entity

4 Cash, salary and fees includes a Long Service payment made during the year to Mr Lynch

©2008 Google©2008 Europa Technologies

©2008 MapData Sciences Pty Ltd, PSMA©2008 Cnes/Spot Image Canberra

Image NASA


Payments to specifi ed Directors and Key Management Personnel for the year ended 30 June 2007

2007

Short-term employee benefi ts Post-employment

benefi ts

Share-based

payments

Total Proportion of remuneration

that is performance

basedCash salary and

fees

Non-monetary benefi ts

Related party

Payments

Superannuation Options

Directors $ $ $ $ $ $ %J J Foley 35,000 16,608 150,000 3,150 192,332 397,090 48M J Lynch 279,585 - 7,890 - 641,106 928,581 69T V Willsteed - - 20,000 - 48,083 68,083 71P B Blood 12,694 - - - - 12,694Other Key Management PersonnelC A J Towsey 148,884 8,123 41,502 29,218 - 227,727 -J F Lynch 152,692 - - 13,116 - 165,808 -R J Morrison 152,312 - 5,942 13,708 - 171,962 -G Foord 96,604 4,079 51,622 7,194 - 159,499 -M B Martin 96,267 432 32,610 7,116 - 136,425 -

974,038 29,242 309,566 73,502 881,521 2,267,869 -

Share based payments granted as compensation for the current yearDirectors and Executive share option planCitigold Corporation Limited has a Directors and Executive share option plan to provide an incentive for future performance and retention of key personnel.

During the fi nancial year, as part of the employee performance and salary review process, the Remuneration Committee invited certain executives to participate in the Company’s Executive Option Plan to provide a retention and performance framework. 5,000,000 options over Ordinary Shares were granted to senior executives.

The general terms and conditions of options affecting remuneration in this or future reporting periods are as follows: (All options have been issued on the same terms and conditions as the Director’s options approved at the 2006 Annual General Meeting.)

The Board does not have a policy in relation to limiting their exposure to risk in relation to options issued to Directors or Executives.

The options will have an exercise price of $0.50, vest over a period of two years, are subjected to performance conditions being achieved and expire 3 years after vesting. These options are for nil consideration and issued for free. The performance conditions are listed below:

Tranche Performance Condition Required Date Number of Options

1 Nil N/A 30%2 Share Price of $0.73

or production rate of 50,000 oz p.a.15 December 2007 35%

3 Share Price of $1.00 or production rate of 100,000 oz p.a.

15 December 2008 35%

Under the conditions of the options each tranche will only vest if and when the performance conditions for that tranche is achieved for a period of 25 or more consecutive or non consecutive days pre the required date and/or 6 months post the required date.



The amount of options available to each executive in each tranche is to the right:

Tranche Number of Options

1 300,000

2 350,000

3 350,000

The following grants of share based payment compensation to executives (below) relate to this fi nancial year:

During Financial Year % of Compensation consisting of optionsName Option granted No. Granted No. Vested % of grant

vested% of grant forfeited

C. Towsey 6 August 2007 1,000,000 650,000 65% Nil 26M. Martin 6 August 2007 1,000,000 650,000 65% Nil 28G. Foord 6 August 2007 1,000,000 650,000 65% Nil 32J. Morrison 6 August 2007 1,000,000 650,000 65% Nil 33J. Lynch 6 August 2007 1,000,000 650,000 65% Nil 32

The following table summarises the future value of options granted at grant date:

Name Total Value of Options granted Value per Option

C. Towsey $133,949 $0.13M. Martin $133,949 $0.13G. Foord $133,949 $0.13J. Morrison $133,949 $0.13J. Lynch $133,949 $0.13

4) Service ContractsManaging Director

Contract Term: 5 years, Commenced January 2007Base Salary: $320,460, inclusive of superannuation, to be reviewed annually by the Remuneration CommitteeTermination Payments:

Payment on early termination by the Group, other than for gross misconduct, equal to 3 years of employment.

Company Secretary/ CFO

Contract Term: Ongoing, Commenced December 2005Base Salary: $210,000, inclusive of superannuation, to be reviewed annually by the Remuneration CommitteeTermination Payments:

Payment on early termination by the Group, other than for gross misconduct, equal to 3 months base salary.

Chief Operating Offi cer

Contract Term: Ongoing, Commenced July 2002Base Salary: $260,000, inclusive of superannuation, to be reviewed annually by the Remuneration CommitteeTermination Payments:


Senior Site Executive

Contract Term: 5 years, Commenced January 2007Base Salary: $225,000, inclusive of superannuation, to be reviewed annually by the Remuneration CommitteeTermination Payments:



General Manager Mining

Contract Term: Ongoing, Commenced July 2004Base Salary: $250,000, inclusive of superannuation, to be reviewed annually by the Remuneration CommitteeTermination Payments:


Exploration Manager

Contract Term: Ongoing, Commenced October 2001Base Salary: $180,000, inclusive of superannuation, to be reviewed annually by the Remuneration CommitteeTermination Payments:


5) Share options exercised during the current yearDuring 2008 Mr Towsey exercised 31,250 options. The exercise of options enabled Mr Towsey to buy Shares in the Company at $0.37 when the share price was $0.43 resulting in a total gain of $1,875.

No other options were exercised during the year by key management personnel or executives of the consolidated entities.

END OF AUDITED REMUNERATION REPORT

DIRECTORS REPORT DECLARATIONThis report is made in accordance with a resolution of directors.

J J Foley M J LynchChairman Director

Sydney30 September 2008


AUDITORS’ INDEPENDENCE DECLARATION


Good corporate governance does not just ensure the company is well managed and directed but it protects the rights and enhances the interests of shareholders

The Board regularly reviews and put in place policies and practices to comply as far as is practicable with ASX Corporate Governance Council’s Principles and Recommendations. In the limited circumstances where the Company’s corporate governance practices do not correlate with the recommendations, the Company does not consider that the practices are appropriate for the Company due to the size of the Company or its Board. As part of the review to further strengthen the company’s governance policies and practices, the Board has adopted in January 2008 a new Board Charter. Relevant principles are listed below.

A. LAY SOLID FOUNDATION FOR MANAGEMENT AND OVERSIGHTThe Board of Directors primary role is to set corporate direction, governance, defi ning broad policy and governs the business in such a way that protects the rights and enhances the interests of shareholders.

As the Board acts on behalf of and is accountable to shareholders, the Board seeks to identify the expectations of shareholders, as well as other regulatory and ethical expectations and obligations. The Board Charter sets out the principal function and responsibility of the Board:

• Development and implementation of corporate strategies • Provide leadership in the development of appropriate

culture and values for the company• Appointment and assessment of the performance of the

Managing Director and Directors • Inputting and monitoring managerial goals• Ensuring the signifi cant risks facing the consolidated

entity have been identifi ed and appropriate and adequate control, monitoring and reporting mechanisms are in place

• Ensuring corporate accountability to shareholders

The Board has delegated responsibility for the day to day operation and administration of the Company to the Managing Director and the executive management team.

B. STRUCTURE THE BOARD TO ADD VALUEThe Board has established a number of committees to facilitate the execution of its duties. Each committee has its own autonomy with authority delegated to it by the Board and the manner in which the committee is to operate.

Current committees of the Board are:

• the audit and fi nance committee• the remuneration committee• the health, safety and environment committee

Audit and Finance CommitteeThe audit and fi nance committee comprises of the following Non-Executive Directors: T V Willsteed (Chairman) and JJ Foley. Since the board consists of only three Directors, one of them being an Executive Director (Managing Director), the company can only appoint two independent Directors instead of the recommended three independent members in the Audit and Finance Committee. Citigold believes that the current board and its committees are appropriately sized as it has adequate skills, expertise and experience to run the company. Moreover, keeping the current board size enable all directors to voice their opinions.

The main responsibilities of the audit and fi nance committee are to supervise the audit function, review the integrity of the company’s fi nancial reporting and ensure compliance with fi nancial reporting and related regulatory requirements. In addition, the committee oversees the company’s risk management system.

Remuneration CommitteeThe Remuneration committee consists of the following Non-Executive Directors: T V Willsteed (Chairman) and JJ Foley. Since the board consists of only three Directors, one of them being an Executive Director (Managing Director), the company can only appoint two independent Directors instead of the recommended three independent members in the Remuneration Committee. As noted previously, Citigold believes that the current board and its committees are appropriately sized as it has adequate skills, expertise and experience to run the company.

The Remuneration Committee’s key responsibilities are:

1) Assists and advises the Board on remuneration guidelines and practices.

2) Reviews and make recommendations on remuneration packages and other terms of employment for directors and senior executives.

3) Reviews the company’s recruitment, retention and termination guidelines and procedure for senior management.

Citigold Corporation Limited has not formed a nomination committee as there are only 3 Directors. The Board is able to effi ciently address the issue of board competencies. The board ensures that all Directors bring relevant complementary skills and experience to the Board and Board performance is reviewed on an annual basis based upon each director’s contribution to specifi c Board objectives.

Health, Safety and Environment CommitteeThe health, safety and environment committee consists of the following executive and Non-Executive Directors:

CORPORATE GOVERNANCE


CORPORATE GOVERNANCE CONTINUED

JJ Foley, TV Willsteed and MJ Lynch. The objectives of the committee are as follows:

• ensuring the Company adopts, maintains and applies appropriate health, safety and environment policies and procedures;

• ensuring that the Company maintains effective health, safety and environment related internal control and risk management systems; and

• providing a formal forum for communication between the Board and senior management in health, safety and environment matters, both Company specifi c and otherwise.

Board CompositionThe Board is comprised of three (3) Directors, being 2 Non-Executive Directors and One Executive Director, Mr M J Lynch. A majority of the Board is Non-Executive Directors, including the Chairman.

The skills, experience and expertise relevant to the position of each Director who is in offi ce at the date of the annual report, their meeting attendances and their term of offi ce are detailed in the Directors’ Report. Each Director brings relevant complementary skills and experience to the Board covering the areas of legal, fi nance and operations.

The Company’s Constitution specifi es that a third of the Directors (with the exception of the Managing Director) must, by rotation, retire from offi ce at each Annual General Meeting (AGM) such that at least one Director stands for election at each AGM. Where eligible, a Director may stand for re-election. All Board appointments are subject to shareholder approval.

IndependenceIn accordance with the Board Charter and ASX Recommendations, the majority of the Board comprises of non-executive directors, including the Chairman. All Non-Executive Directors are regarded as independent and free of any relationship that may confl ict with the interest of the company.

Directors must disclose to the Board actual or potential confl icts that may or might reasonably be thought to exist between the interest of the director and the interest of the company. Directors are required to adhere strictly to constraints on their participation and voting in relation to any matter in which they may have a confl ict of interest.

Entities connected with Mr J J Foley had business dealings with the consolidated entity during the

year. Mr J J Foley declared his interests in those dealings to the Company and took no part in

decisions relating to them. These dealings were not considered to be of an amount

or nature that would affect Mr Foley’s independent judgement.

Entities connected with Mr M J Lynch had business dealings with entities in the consolidated entity during the year. Mr M J Lynch declared his interests in those dealings to the Company and took no part in decisions relating to them.

C. PROMOTE ETHICAL DECISION MAKING All directors, executives and staff of the consolidated entity are required to abide by all legal requirements, the Listing Rules of the Australian Securities Exchange, the Corporations Act with the regard to trading in the Company’s securities and appropriate standards of ethical conduct with regard to the operation of the consolidated entity.

Code of ConductA Code of Conduct (the Code) as adopted by the Board sets out ethical standards expected of all directors, executives and employees. The Code is reviewed and updated as necessary to generally refl ect industry standards of integrity and professionalism. The Code covers:

• professional conduct• other employees• confl icts of interest• customer and supplier relations• compliance with laws and regulations• confi dential information

Trading in Citigold’s sharesEmployees, offi cers and directors who have access to, or knowledge of, material inside information from or about the company are prohibited from buying, selling or otherwise trading in the company’s stock or other securities until the release of this information to the public through the ASX.

“Insider” information includes any information concerning the company’s fi nancial position, strategy or operations which, if made public, would be likely to have a material effect on the price or value of the securities of the company and the information would, or would be likely to, infl uence persons who commonly invest in securities in deciding whether to acquire or dispose of the securities.

D. SAFEGUARD INTEGRITY IN FINANCIAL REPORTINGAs part of Citigold’s commitment to a transparent system for auditing and reporting of company’s fi nancial performance, the company has established the Audit and Finance Committee. The audit and fi nance committee supervise the audit function including the appointment of the external auditor, the preparation of fi nancial statements and assesses the adequacies of internal control, and fi nancial risk system. In fulfi lling its responsibilities, the audit and fi nance committee regularly provide a forum for communication between the board, management and the external auditors. A formal charter for audit and fi nance committee is adopted since September 2005.


The Audit and Finance Committee has adopted and complies with a formal charter.

The Chief Executive Offi cer and Chief Financial Offi cer have declared in writing that the fi nancial statements for the year ended 30 June 2008 represent a true and fair view of Citigold’s fi nancial position and performance and that the reports conform to relevant accounting standards.

E. MAKE TIMELY AND BALANCED DISCLOSUREAll Directors, executives and staff of the consolidated entity are made aware of the ASX’s continuous disclosure requirements and operate in an environment where emphasis is placed on full, timely and honest disclosure to the market.

The board adopts a Continuous Disclosure Policy to ensure that information considered material by the company is immediately lodged with ASX. Moreover, Citigold’s website contains recent and historical information, including ASX announcements, fi nancial reports and presentations.

F. RESPECT THE RIGHTS OF SHAREHOLDERSCitigold is committed in providing shareholders with timely, detailed and factual company information.

Information is communicated to shareholders through:

• The annual report which is accessible by all shareholders

• The half-yearly report which is made available by way of an ASX release

• The Annual General Meeting• ASX releases in accordance with the consolidated

entity’s continuous disclosure obligations • Information available on the Company’s website at

www.citigold.com

Shareholders are invited to advise the Company of their email addresses. ASX announcements, once released, are then able to be emailed directly to the shareholder.

In addition, all shareholders are encouraged to attend the AGM and use the opportunity to ask questions.

The company’s external auditor attends the company’s annual general meeting and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditors report.

F. RECOGNISE AND MANAGE RISKDue to the size of the Board, a separate risk management committee has not been established. The Board believes that it is important for all Board members to take a proactive role to the company’s risk management and internal compliance and control procedures. The Board monitors

the fi nancial and operational aspects of the company’s activities and considers the advice of other external advisors.

The risk management approach that the Board employs includes a) assessing internal policies and processes for determining and managing key risk areas such as noncompliance with laws regulations standards and best practice guidelines, litigation and claims and other relevant business risk b) having a sound risk management system, policies and internal control c) Meeting of key stakeholders to understand and discuss company’s control environment.

Citigold currently operates on a NOSA Five Star Integrated Risk Management System. This is a commercial product originally produced by the National Occupational Safety Association, operated by Citigold, with the results audited annually by external consultants. This system identifi es all aspects of risks of the operation, particularly those related to safety, health, environment and social impact. Citigold’s operations are subject to regulation and regular inspection and monitoring by the Queensland State Government Department of Mines and Energy and the Environmental Protection Authority.

The Managing Director and CFO have not given a written statement to the board in accordance with best practice recommendation 7.2 because the board considers that its direct management and oversight of risk ensures a sound system of risk management and internal compliance and control that is operating effi ciently and effectively in all material respects.


CORPORATE GOVERNANCE CONTINUED

G. ENCOURAGING ENHANCED PERFORMANCEReview of Directors and Board PerformanceCitigold considers the evaluation of directors and senior executive performance as important in establishing a culture of performance and accountability.

The Board and Director’s performance is reviewed on an annual basis. The goals of review are based upon each director’s contribution to specifi c Board objectives and the objectives of board committees in which the director participates.. The Chairman provides each director with confi dential feedback on performance and it is used to develop a development plan for each director. The remuneration and nomination committee also carries out performance reviews of the Managing Director/CEO and the Executive Management Team on a yearly basis.

At the AGM, the shareholders will have the opportunity to voice their opinion on the performance of the Board. Furthermore at every second year of AGM, the shareholders can exercise their right to remove the Non-Executive Director from offi ce if the shareholders deem that the non executive director’s performance is not up to standard.

Director EducationCitigold Corporation Limited has a policy to educate new Directors about the nature of the business and current issues, strategic direction and expectations of Citigold in regards to the performance of Directors. New Directors undergo an induction process in which they will be given a full briefi ng on the company. This includes meeting with key executives, tour of mining operation, an induction package and presentation. Directors and the senior executives are also given access to continuing education opportunities to develop their skills and knowledge in the area of governance processes and in the company’s industry.

Independent Professional Advice and Access to Company’s InformationSubject to annual limit or Board approval, Directors and Board committees have the right, in connection with their duties and responsibilities, to seek independent, professional advice at the Company’s expense. Directors also have the right of access to all relevant information that may help them in exercising their duties subjected

to protocol set out in the Board Charter.

H. REMUNERATE FAIRLY AND RESPONSIBLY

Board RemunerationNon-Executive Directors’ remuneration

may not exceed the limit approved

by shareholders which is currently at a combined total of A$150,000. Non-Executive Directors may participate in equity schemes of the company subject to the shareholders approval, such as option schemes, that are designed to encourage enhanced performance of the participant.

Executive RemunerationThe Remuneration Committee, consisting of two Non-Executive Directors, advises the Board on remuneration policies and practices. The Committee can make recommendations on remuneration packages and other terms of employment for executive directors and senior executives. Executive remuneration and other terms of employment are reviewed by the Committee when necessary having regard to performance, market conditions and relevant comparative information and independent expert advice.

Citigold’s senior executives participate in a share option plan linking Citigold’s performance to their remuneration designed to encourage enhanced performance of the participant. The senior executive share option plan was not approved by shareholders because the options were granted on the same terms and conditions as the option plan previously approved by shareholders for the Directors.

Further details in relation to Director and Executive remuneration can be found in the director’s report.

I. RECOGNISES THE IMPORTANCE OF ENVIRONMENTAL AND OCCUPATIONAL HEALTH AND SAFETY ISSUESCitigold Corporation Limited recognises the importance of environmental and occupational health and safety (OHS) issues and is committed to the highest levels of performance. To help meet this objective an Environmental, Health and Safety Management System (EHSMS) has been established by mine management. The EHSMS is a tool that allows the systematic identifi cation of environmental and OHS issues and ensures they are managed in a structured manner.

Through the EHSMS, the consolidated entity aims to:

• comply with all relevant legislation• continually assess and improve the impact of its

operations on the environment• encourage employees to actively participate in the

management of environmental and OHS issues, and• use energy and other resources effi ciently

Information on compliance with signifi cant environmental regulations is set out in the Directors’ Report.


FINANCIALSTATEMENTSFOR THE YEAR ENDED 30 JUNE 2008



FINANCIAL STATEMENTS CONTINUED

CONSOLIDATED INCOME STATEMENTFOR THE YEAR ENDED 30 JUNE 2008

Consolidated The CompanyNote Year Ended Year Ended Year Ended Year Ended

30 June 2008 30 June 2007 30 June 2008 30 June 2007$ $ $ $

Sales Revenue 12,156,873 2,759,518 - -Cost of sales (6,379,797) (3,213,689) - -

Gross Profi t/(Loss) 5,777,076 (454,171) - -Other Income 2 639,377 914,598 444,973 969,942Salaries and employee benefi ts expense

(3,035,191) (4,710,083) (40,966) (72,820)

Share based payments expense (496,054) (881,521) (496,054) (881,521)Consulting expense (767,382) (643,322) (625,569) (452,137)Other expenses 3 (2,785,466) (2,350,738) (2,450,331) (4,675,515)Depreciations and amortisation expense

3 (1,747,518) (1,371,687) (912,869) (633,981)

Finance costs 4 (752,266) (548,159) (707,983) (507,215)

Loss before income tax (3,167,424) (10,045,083) (4,788,799) (6,253,247)

Income tax 6 795,721 2,872,545 1,175,771 1,628,630

Loss after tax from operations (2,371,703) (7,172,538) (3,613,028) (4,624,617)

Loss attributable to minority interest

33 86 - -

Loss attributable to members of the parent entity

(2,371,670) (7,172,454) (3,613,028) (4,624,617)

Earnings/ (Loss) per share:Basic and diluted EPS (Cents per share)

7 (0.36) (1.18)

The above income statement should be read in conjunction with the accompanying notes.


CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDED 30 JUNE 2008



Current assetsCash and cash equivalents 9 1,581,300 4,371,541 1,543,897 4,806,229Trade and other receivables 10 153,364 888,010 46,937 361,713Inventories 11 1,747,272 706,312 503,232 507,053Investments (available for sale) 12 1,630,000 1,956,000 1,630,000 1,956,000 Total current assets 5,111,936 7,921,863 3,724,066 7,630,995

Non-current assetsProperty, plant and equipment 13 208,716,801 182,635,103 198,842,701 172,813,065 Other Non current assets 14 783,031 725,054 778,935 720,958Other receivables 10 - - 11,231,441 11,395,870Other fi nancial assets 15 - - 10,697,477 10,697,477Total non current assets 209,499,832 183,360,157 221,550,554 195,627,370Total assets 214,611,768 191,282,020 225,274,620 203,258,365

Current liabilitiesTrade and other payables 16 3,017,589 3,115,291 278,882 300,132Borrowings 17 3,294,046 1,704,572 3,178,291 1,433,622Total current liabilities 6,311,635 4,819,863 3,457,173 1,733,754

Non current liabilitiesBorrowings 17 3,472,037 3,019,473 3,270,767 2,735,955Provisions 19 17,041,524 14,232,766 19,271,955 16,849,261Total non-current liabilities 20,513,561 17,252,239 22,542,722 19,585,216

Total liabilities 26,825,196 22,072,102 25,999,895 21,318,970

Net assets 187,768,470 169,209,919 199,274,625 181,939,395

EquityIssued capital 20 124,357,850 112,302,064 124,357,850 112,302,064 Reserves 21 86,527,192 77,634,722 85,955,764 77,063,292 Accumulated losses 22 (23,167,878) (20,796,206) (11,038,989) (7,425,961)Parent entity interest 187,717,164 169,140,580 199,274,625 181,939,395Minority interest 69,306 69,339 - -Total equity 187,786,470 169,209,919 199,274,625 181,939,395


FINANCIAL STATEMENTS CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2008



Total recognise income and expense attributable to:Equity holders of the parent (2,371,670) (7,172,454) (3,613,028) (4,624,617)Minority interest (33) (86) - -Total Loss for the period (2,371,703) (7,172,540) (3,613,028) (4,624,617)Total equity opening balance 169,202,919 139,976,659 181,939,395 150,158,213Change in accounting Policy - - - 5,200,597Total equity revised opening balance

169,209,919 139,976,659 181,939,395 144,957,616

Loss for the period (2,371,703) (7,172,540) (3,613,028) (4,624,617)Reserve movement 8,892,469 11,625,044 8,892,472 11,625,043Contribution of equity, net of transaction costs

20 12,055,786 24,780,756 12,055,786 24,780,756

Total equity closing balance 187,786,470 169,209,919 199,274,625 181,939,395

The above statement of changes in equity should be read in conjunction with the accompanying notes.


CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 30 JUNE 2008



Cash fl ows from operating activitiesReceipts from customers 13,403,830 4,670,347 706,081 500,420Payments to suppliers (13,539,103) (9,554,947) (2,589,859) (2,023,282)Interest paid and other fi nance expenses

(1,036,892) (1,180,562) (1,048,084) (925,575)

Net cash fl ow from operating activities

8 (1,172,165) (6,065,161) (2,931,862) (2,448,437)

Cash fl ows from investing activitiesInterest received 87,075 285,156 86,088 66,778Payment for Properties, plant and equipment

(3,711,663) (6,039,401) (2,824,947) (4,560,881)

Development costs (12,122,574) (7,566,183) (12,122,574) (7,566,183)Amounts repaid (advanced) to related parties

- - 164,430 (3,913,230)

Net cash fl ow from investing activities

(15,747,162) (13,320,428) (14,697,003) (15,973,516)

Cash fl ows from fi nancing activitiesNet proceeds from issues of equity securities

12,055,788 24,562,611 12,055,787 24,562,611

Proceeds from borrowings 3,797,254 1,626,044 3,797,255 1,071,577Repayment of borrowings (1,723,958) (4,616,982) (1,486,509) (4,537,816)Net cash fl ow from fi nancing activities

14,129,084 21,571,673 14,366,533 21,096,372

Net increase/(decrease) in cash and cash equivalents

(2,790,241) 2,186,084 (3,262,332) 2,674,419

Cash at beginning of year 4,371,541 2,185,457 4,806,229 2,131,810

Cash and cash equivalents at end of year

9 1,581,300 4,371,541 1,543,897 4,806,229

The above cash fl ow statement should be read in conjunction with the accompanying notes.


FOR THE YEAR ENDED 30 JUNE 2008The fi nancial report of Citigold Corporation Limited for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the directors on 30 September 2008 and covers Citigold Corporation Limited as an individual entity as well as the consolidated entity consisting of Citigold Corporation Limited and its subsidiaries as required by the Corporations Act 2001.

Citigold Corporation Limited is a company limited by shares incorporate in Australia whose shares are publicly traded on the Australian Stock Exchange.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe following signifi cant accounting policies have been adopted in the preparation and presentation of the year fi nancial report. The fi nancial reports include separate fi nancial statements for Citigold Corporation Limited as an individual entity and the consolidated entity consisting of Citigold Corporation Limited and its subsidiaries.

Basis of PreparationThe fi nancial report is a general purpose fi nancial report, which has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The fi nancial report has been prepared on the basis of historical cost, except for the revaluation of certain noncurrent assets and fi nancial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

Statement of ComplianceThe fi nancial report complies with Australian Accounting Standards which include AIFRS. Compliance with AIFRS ensures that the fi nancial report complies with International Financial Reporting Standards (IFRS).

a) Basis of consolidation The fi nancial report of the Citigold Corporation Group (“the consolidated entity”) includes the consolidation of Citigold Corporation Limited and its respective subsidiaries. Subsidiaries are entities controlled by the parent entity. Control exists where either parent entity has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. Subsidiaries are included in the consolidated fi nancial report from the date control commences until the date control ceases. The effects of all transactions between entities within the Citigold Corporation Group have been eliminated.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.

Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Where the Citigold Corporation Group’s interest is less than 100 per cent, the interest attributable to outside shareholders is refl ected in minority interests. Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively.

Subsidiaries are accounted for in the parent entity fi nancial statements at cost.

b) Foreign Currency TranslationThe results and fi nancial position of each entity are expressed in Australia dollars, which are the functional currency of Citigold Corporation Limited and the presentation currency for the consolidated fi nancial statements.

In preparing the fi nancial statements of individual entities, transaction in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the dates of transactions. At balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Non monetary items carried at fair value that are denominated in foreign currencies are retranslated at rates prevailing on the date when fair value is determined. Non monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

c) BorrowingsLoan and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the loans and borrowings using the effective interest method.

d) Cash and cash equivalentsFor the purposes of the Cash Flow Statement, cash and cash equivalents includes cash on hand and at bank, deposits held at call with fi nancial institutions, other short term, highly liquid investments with maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignifi cant risk of changes in value and bank overdrafts.

e) Trade receivablesTrade receivables are recognised at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 2 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off.

NOTES TO THE FINANCIAL STATEMENTS


f) Employee benefi ts1) Provision for wages and salaries, annual leave and long service leaveProvision is made for benefi ts accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefi ts expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefi ts which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outfl ows to be made by the consolidated entity in respect of services provided by employees up to reporting date.

The liability for long service leave is recognised in the provision for employee benefi ts and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash fl ows.

2) Share-based payment transactionsThe Group provides benefi ts to employees (including directors) of the Group in the form of share-based payment transactions, whereby employees render services in exchange for shares or options over shares. Currently, Citigold Corporation Limited has a Directors and Executive share option plan.

The fair value of options granted under the Citigold Corporation Limited Directors and Executive share option plan are recognised as an employee benefi t expense with a corresponding increase in equity (share option reserve). The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. Fair value is determined by using the Black-Scholes option pricing model. In determining fair value, no account is taken of any performance conditions other than those related to the share price of Citigold Corporation Limited (“market conditions”). The cumulative expense recognised between grant date and vesting date is adjusted to refl ect the directors best estimate of the number of options that will ultimately vest because of internal conditions of the options, such as the employees having to remain with the company until vesting date, or such that employees are required to meet production targets. No expense is recognised for options that do not ultimately vest

because internal conditions were not met. An expense is still recognised for options that do not ultimately vest because a market condition was not met.

g) Exploration, evaluation and development expenditureExploration and evaluation costs are written off in the year they are incurred, apart from acquisition costs which are carried forward where right of tenure of the area of interest is current and the expenditure is expected to be recouped through sale or successful development and exploration of the area of interest or where exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and signifi cant operations in, or in relation to, the area of interest are continuing.

Development expenditure is capitalised in the year it is incurred.

h) Impairment of assetsAt each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash fl ows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset for which the estimates of future cash fl ows have not been adjusted.

i) TaxationCurrent taxCurrent tax is the expected tax payable on the taxable income for the period, using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred TaxDeferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of the assets and liabilities in the fi nancial statements and the corresponding tax base of those items.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised


NOTES TO THE FINANCIAL STATEMENTS CONTINUED

to the extent that it is probable that suffi cient taxable amounts will be available against which deductible temporary differences or unused tax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the assets and liability give rise to them are realised or settled, based on tax rates and tax laws that have been enacted by the reporting date.

Current and deferred tax for the period is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is recognised directly in equity.

Tax consolidationThe parent entity company and all its wholly-owned Australian resident entities are part of a tax consolidated group under Australian taxation law. Citigold Corporation Limited is the head entity in the tax-consolidated group.

Goods and services taxRevenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash fl ows are included in the Cash Flow Statement on a gross basis. The GST component of cash fl ows arising from investing and fi nancing activities which is recoverable from, or payable to, the taxation authority is classifi ed as operating cash fl ows.

j) InventoriesInventories are valued at the lower of cost and net realisable value. Costs are assigned to inventory on hand using the fi rst in fi rst out method. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

k) Leased assetsAssets held under leases which result in entities in the consolidated entity receiving substantially all the risks and rewards of ownership of the asset (fi nance leases) are capitalised at the lower of the fair value of the property, plant and equipment or the estimated present value of the minimum lease payments. The corresponding fi nance lease obligation is included within interest bearing liabilities. The interest element is allocated to accounting periods during the lease term to refl ect a constant rate of interest on the remaining balance of the obligation for each accounting period. Finance leased assets are amortised at a straight line method over the estimated useful life of the asset. Operating lease assets are not capitalised and rental

payments are included in the Income Statement on a straight-line basis over the lease term.

l) Financial Assets The group classifi es its fi nancial assets as available for sale fi nancial assets. The classifi cation depends on the purpose for which the investments were acquired. Management determines the classifi cation of its investments at initial recognition.

Available-for-sale fi nancial assetsAvailable-for-sale fi nancial assets comprise investments in listed and unlisted entities and any non-derivatives that are not classifi ed as any other category, and are classifi ed as non-current assets. After initial recognition, these investments are measured at fair value with gains or losses recognised as a separate component of equity (available-for-sale investments revaluation reserve). Where losses have been recognised in equity and there is objective evidence that the asset is impaired, the cumulative loss, being the difference between the acquisition cost and current fair value less any impairment loss previously recognised in the income statement, is removed from equity and recognised in the income statement.

Reversals of impairment losses on equity instruments classifi ed as available-for-sale cannot be reversed through the income statement. Reversals of impairment losses on debt instruments classifi ed as available-for-sale can be reversed through the income statement where the reversal relates to an increase in the fair value of the debt instrument occurring after the impairment loss was recognised in the income statement.

The fair value of quoted investments are determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash fl ows of the underlying net asset base of the investment.

Impairment of Financial AssetsFinancial assets, other than those at fair value through profit and loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after initial recognition of the financial asset, the estimated future cash flow of the investment have been impacted.

For equity instruments, including listed or unlisted shares, objective evidence of impairment includes information about signifi cant changes with an adverse effect that have take place in technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the


investment in the equity instrument may not be recovered. Where there is a signifi cant or prolonged decline in the fair value of an available for sale fi nancial asset (which constitutes objective evidence of impairment), the full amount of the impairment, including any amount previously charged to equity, is recognised in the income statement.

In respect of available for sale equity instruments, any subsequent increase in fair value after an impairment loss is recognised directly in equity.

m) PayablesTrade payables and other accounts payable are recognised when entities in the consolidated entity become obliged to make future payments resulting from the purchase of goods and services. These amounts are unsecured and have 30-60 day payment terms.

n) Property, plant and equipmentDevelopment Properties are measured at fair value less accumulated depreciation. Any accumulated depreciation at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated as the revalued amount of the asset. A revaluation surplus is credited to the asset revaluation reserve included within shareholder’s equity unless it reverses a revaluation decrease on the same asset previously recognised in the income statement. A revaluation defi cit is recognised in the income statement unless it directly offsets a previous revaluation surplus on the same asset in the asset revaluation reserve. An annual transfer is made from the asset revaluation reserve to retained earnings for the depreciation charge recognised in the income statement (net of tax) relating to the revaluation surplus. On disposal, any revaluation reserve relating to sold assets is transferred to retained earnings.

All other plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying value or recognised as a separate asset only when it is probable that a future economic benefi t associated with the item will fl ow to the Company and the cost can be measured reliably. All other repairs and maintenance are charged to the income statement during the reporting period in which they are incurred.

Depreciation of property, plant and equipmentThe carrying amounts of property, plant and equipment (including the original capital expenditure and any subsequent capital expenditure) is depreciated to its residual value over the useful economic life of the specifi c assets concerned or the life of the mine or lease, if shorter. The rates vary between 4% and 40%

Depreciation is calculated on a straight line basis so as to write off the net cost or other re-valued amount of each asset over its

expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method.

Depreciation rates and methods shall be reviewed at least annually and, where changed, shall be accounted for as a change in accounting estimate. Where depreciation rates or methods are changed, the net written down value of the asset is depreciated from the date of the change in accordance with the new depreciation rate or method. Depreciation recognised in prior fi nancial years shall not be changed, that is, the change in depreciation rate or method shall be accounted for on a ‘prospective’ basis.

o) Provision for restoration and rehabilitationEntities in the consolidated entity are generally required to decommission and rehabilitate mine and processing sites at the end of their producing lives to a condition acceptable to the relevant authorities and consistent with its environmental policies. The expected cost of any approved decommissioning or rehabilitation programme is provided when the related environmental disturbance occurs, based on the interpretation of environmental and regulatory requirements.

Where there is a change in the expected decommissioning and restoration costs, an adjustment is recorded against the carrying value of the provision and any related asset, and the effect is then recognised in the Income Statement in the year incurred.

The provisions referred to above does not include any amounts related to remediation costs associated with unforeseen circumstances. Such costs are recognised when environmental contamination as a result of oil and chemical spills, seepage or other unforseen events gives rise to a loss which is probable and reliably estimable. The cost of other activities to prevent and control pollution is charged to the Income Statement as incurred.

p) Contributed EquityOrdinary shares are classifi ed as equity.

Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefi t. Costs directly attributable to the issue of new shares or options associated with the acquisition of a business are included as part of the purchase consideration.

q) Earnings per share1) Basic earnings per shareBasic earnings per share is calculated by dividing the profi t attributable to members of the Group, adjusted for the after-tax effect of preference dividends on preference shares classifi ed as equity, by the weighted average number of ordinary shares outstanding during the fi nancial year,



adjusted for bonus elements in ordinary shares during the year. The weighted average number of issued shares outstanding during the fi nancial year does not include shares issued as part of the Employee Share Option Plan that are treated as in-substance options.

2) Diluted Earnings per shareEarnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

r) Revenue recognitionSale of goodsRevenue from the sale of goods is recognised when the consolidated entity has transferred to the buyer the signifi cant risks and rewards of ownership of the goods.

Other incomeOther income is recognised on a receivable basis.

s) Borrowing CostsBorrowing costs are expensed unless capitalised to qualifying assets.

t) New accounting standards and interpretationsCertain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting periods. The Company’s and consolidated entity’s assessment of the impact of these new standards and interpretations is that the application of the standards and interpretation will have no material impact on the Company’s or Consolidated Entity’s fi nancial reports.

u) Accounting estimates and judgementsCritical JudgementsManagement have made the following judgements when applying the Group’s accounting policies:

• Classifi cation of shares in Gateway Mining Limited as Available for Sale

• Classifi cation of Development Properties as Tangible Assets and accounted for under AASB 116

Critical accounting estimates and assumptionsDetails of critical accounting estimates and assumptions about the future made by management at reporting date are set out below:

Assumptions on the valuation of share options per note 18.

Assumption on the valuation of the Development Property per note 13.

2. OTHER INCOME

Consolidated The CompanyYear Ended Year Ended Year Ended Year Ended


Interest received 87,075 285,156 86,088 66,778Equipment Hire 157,989 8,240 - -Government Rebates 233,872 49,359 - -Sundry Income 160,441 523,643 4,330 500,419Brilliant Gold Reef Project (Reimbursed expense) - - 354,540 354,545Gain on sale of assets - 48,200 - 48,200Total 639,377 914,598 444,973 969,942


3. EXPENSESOther Expenses



Insurance 127,999 89,242 116,955 76,935Offi ce administration costs 522,531 522,109 272,426 225,488Government Statutory Royalty Payments 340,101 - 340,101 -Corporate administration 556,834 713,157 512,040 559,516Tenement charges and costs 281,145 196,558 269,786 195,907Travel expenses 484,392 298,779 142,339 140,320Professional fees 116,092 182,647 116,093 145,010Loss on currency transactions 372 22,217 46 17,990Impairment of debtors - 30 354,545 2,988,348Loss on available for sale asset 326,000 326,000 326,000 326,000Total 2,785,466 2,350,738 2,450,331 4,675,515

Depreciation and Amortisation Expenses



Plant and Equipment 1,747,518 1,371,688 912,869 633,981

Operating Leases Expense



Operating Leases Expenses 18,207 33,570 7,241 6,997

Superannuation Expense



Superannuation Expense 337,608 167,971 - -



4. FINANCE COSTS



Royalty Payments 238,894 - 238,894 -Interest Expense 173,636 548,159 129,353 507,215Investment returns 339,736 - 339,736 -Total 752,266 548,159 707,983 507,215

Royalty payments and investment returns relate to the return on $1million investment in Citigold in a prior period. They are only payable on the fi rst 40,000 ounces produced on the Warrior Mining Lease.

5. AUDITORS REMUNERATION



Audit and review of fi nancial reports 41,634 33,437 41,634 33,437Total 41,634 33,437 41,634 33,437

6. INCOME TAX EXPENSE



(a) Income tax expense Current tax - - - -

Deferred tax asset 795,721 2,872,545 1,175,771 1,628,630 Deferred tax liability 3,598,465 4,604,367 3,598,465 4,604,367 Deferred tax allocated to equity (3,598,465) (4,604,367) (3,598,465) (4,604,367)Total 795,721 2,872,545 1,175,771 1,628,630

(b) Reconciliation of effective tax rate Loss from continuing operations before

tax(3,167,423) (10,045,083) (4,788,799) (6,253,247)

Prima facie tax benefi t calculated at 30% on the profi t/ (loss) (950,227) (3,111,325) (1,436,640) (1,973,774) Tax effect on the amounts that are not

tax deductible in calculating income: Share-based payments 148,816 264,456 148,816 264,456 Sundry items 5,690 (25,676) 112,053 80,688Income Tax Benefi t/(Expense) (795,721) (2,872,545) (1,175,771) (1,628,630)




(c) Reconciliation of Deferred Tax Liability Tax effect on revaluation of mining tenements

36,247,796 32,649,331 36,247,796 32,649,331

Total deferred tax liability (at 30%) 36,247,796 32,649,331 36,247,796 32,649,331

(d) Reconciliation of Deferred Tax Liability/ Asset

Total deferred tax asset (19,743,518) (18,947,797) (17,483,645) (16,307,874)Total deferred tax liability 36,247,796 32,649,331 36,247,796 32,649,331

Net Deferred Tax Liability/ (Asset) 16,504,278 13,701,534 18,764,151 16,341,457

The deferred tax liability is recognised in equity not the income statement due to the revaluation of mining tenements being credited directly to equity.

7. EARNINGS PER SHARE (EPS)a) Basic earnings per shareThe calculation of basic earnings per share at 30 June 2008 was based on the loss attributable to ordinary shareholders of $2,371,670 (loss of $7,172,454 in 2007) and weighted average number of ordinary shares outstanding during the fi nancial year ended 30 June 2008 of 656,388,203 (606,878,226 in 2007), calculation as follows:

Consolidated Year Ended Year Ended

30 June 2008 30 June 2007$ $

Profi t (loss) for the period* (2,371,670) (7,172,454)

Weighted average number of ordinary sharesOpening Balance 641,902,700 566,927,749Effect of shares issued in July - 1,685,319Effect of shares issued in August 113,233 9,832,717Effect of shares issued in September - 8,274Effect of shares issued in October - 17,366,526Effect of shares issued in November 12,722,292 303,726Effect of shares issued in December - 5,839,981Effect of shares issued in February - 41,918Effect of shares issued in March 520,086 -Effect of shares issued in April - 2,936,621Effect of share purchase plan May - 973,151Effect of shares issued in May 1,129,892 962,245Total weighted average number of ordinary shares used in calculating basic earnings per share

656,388,203 606,878,226

Loss per share – cents (0.36) (1.18)*all attributable to ordinary shareholders

31,260,716 options (2007 – 26,867,672 options) on issue at year end have not been taken into account in calculating diluted EPS because the effect would be anti-dilutive.

Income Tax Expense Continued



b) Correction of error in calculating the EPS in prior yearIn the prior year fi nancial report the disclosed EPS calculation included an incorrectly calculated weighted average number of ordinary shares. The correction of this error together with the impact of correcting the recognised tax benefi t results in a restatement of the EPS as follows

Prior year EPS 1.78Corrected EPS 1.18

8. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES



Net Loss for the year (2,371,703) (7,172,538) (3,613,028) (4,624,617)

Adjustments for:Depreciation 1,747,518 1,371,688 912,869 633,981Interest Received (87,075) (285,156) (86,088) (66,778)Executive Share Payments 496,054 881,521 496,054 881,521Deferred Tax Benefi t (795,721) (2,872,545) (1,175,771) (1,628,630)Gain on sale of Plant, property and equipment

- (48,200) - (48,200)

Unrealised loss on investments 326,000 326,000 326,000 326,000Unrealised Impairment of Debtors - - - 2,988,318(Increase)/ decrease in Trade and other receivables

676,669 1,119,742 336,996 (567,699)

(Increase)/ decrease in inventories (1,040,960) (220,742) (14,575) (46,053)(Decrease)/ increase in trade and other payables

(485,211) 518,862 (114,319) (296,280)

Increase/ (decrease) in Employee provisions

362,256 316,208 - -

Net Cash from operating activities (1,172,165) (6,065,161) (2,931,862) (2,448,437)

9. CASH AND CASH EQUIVALENTS



Bank Balances 1,468,329 4,271,541 1,430,926 4,706,229Call deposits 112,971 100,000 112,971 100,000Cash and cash equivalents in cash fl ow statement

1,581,300 4,371,541 1,543,897 4,806,229

Bank balance is earning interest at a rate between 0.5% and 4.7% per annum. The call deposit is earning interest at the rate of 5.75% per annum.

Cash and cash equivalents are held with two high quality fi nancial institutions.


10. RECEIVABLES



CURRENTTrade Debtor 1,080 1,411 3,342,964 2,988,318Trade Debtor impairment - - (3,342,964) (2,988,318)Security Bonds 22,582 21,225 16,854 16,854Prepayments 10,904 - 10,200 -GST paid on acquisitions 118,798 865,374 19,883 344,859Total 153,364 888,010 46,937 361,713

NON CURRENTReceivables (wholly owned subsidiaries) - - 11,231,441 11,395,870Total - - 11,231,441 11,395,870

All of the above receivables are held by a credit worthy party. Recoverability of the receivables is highly probable.

Analysis of Trade Debtor Impairment account



Opening Balance - - 2,988,318Provisions for doubtful receivables - - 354,546 2,988,318Receivables written off during the year - - - -Closing Balance - - 3,342,864 2,988,318

11. INVENTORIES



CurrentRaw Material 955,860 - 475,573 -Consumables 763,345 660,259 - 460,999Gold and Silver on hand 28,067 46,053 27,659 46,054Total 1,747,272 706,312 503,232 507,053



12. INVESTMENTS (AVAILABLE FOR SALE)



Current InvestmentListed equity securities – at fair value 1,630,000 1,956,000 1,630,000 1,956,000

Equity securities are currently listed on the Australian Stock Exchange. $326,000 decline in the fair value of the listed equity securities has been expensed.

13. PLANT, PROPERTY AND EQUIPMENT



Plant, Property and Equipment

Exploration, Evaluation and Development expenditureCosts brought forward in respect of areas of interest:

46,872,430 39,306,247 46,872,430 39,306,247

Costs incurred in period 12,014,800 7,452,427 12,014,800 7,452,427Capitalised Borrowing Costs 107,774 113,756 107,774 113,756Less: Accumulated amortisation -1,142,988 -1,142,988 -1,142,988 -1,142,988Total exploration, evaluation and development expenditure

57,852,016 45,729,442 57,852,016 45,729,442

Development Property – at independent valuationIndependent valuation brought forward 126,483,017 111,135,127 121,475,727 106,127,837Net revaluation increment 11,994,982 15,347,890 11,994,982 15,347,890Less: Accumulated amortisation - - - -Total development property 138,477,999 126,483,017 133,470,709 121,475,727

Freehold Land and Buildings– at deemed costCarrying amount at beginning of year 518,548 518,548 367,500 367,500Carrying amount at end of year 518,548 518,548 367,500 367,500

Plant and EquipmentAt Cost 18,446,860 14,735,198 9,687,120 6,862,172Less: accumulated depreciation -6,578,622 -4,831,102 -2,534,644 -1,621,774Carrying amount at end of year 11,868,238 9,904,096 7,152,476 5,240,398Total Carrying Value 208,716,801 182,635,103 198,842,701 172,813,065


Reconciliation of Plant and Equipment:



Plant and EquipmentCarrying amount at beginning of year 9,904,096 5,995,508 5,240,398 5,952,554Net additions during year 3,711,660 5,280,276 2,824,947 -78,175Less: depreciation charged in year -1,747,518 -1,371,688 -912,869 -633,981Carrying amount at end of year 11,868,238 9,904,096 7,152,476 5,240,398

Leased Plant and MachineryEntities in the consolidated entity lease production equipment under a number of hire purchase and fi nance lease agreements. At the end of each lease the entity has the option to purchase the equipment at a benefi cial price. For the additions in the group during the period, an amount of $2,768,595 (2007: $3,122,992) was in relation to assets under hire purchase and fi nance lease. At 30 June 2008, the net carrying amount of leased plant and machinery was $7,175,641(2007: $5,191,697). The lease equipment secures lease obligations.

Exploration, Evaluation and Development expenditure The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Independent ValuationThe valuation was conducted by I. H. Sandercock, BEng(Mining), MAusIMM (CP), MSME, MMICA, of Sandercock Associates Pty Limited, consulting mining engineers and independent valuers of mining assets. Mr Sandercock is a mining engineer with over 33 years experience in the area of mine operations and mine consulting. Sandercock Associates Pty Limited is a mineral industry consulting group, specialising in independent due diligence reviews, valuations and technical audits of resources and reserves, mining and processing operation, project feasibility studies and project management. He has no vested interest in Citigold or the outcome of the valuation, and was paid a once-only, per diem fee for the valuation at normal industry rates.

The key assumptions used to derive this valuation are as follows:

Discount rate 12.5%Gold Price AUD 750Plant Recovery 95%Grams per tonne (extracted) 8.74 to 9.13Grams per tonne post ore sorting 9.13 to 17.90Mine Life 15 yearsOunces produced (per annum) 50,009 to 310,490

14. OTHER NON-CURRENT ASSETS



Security deposit against restoration costs lodged with the Department of Mines and Energy

529,181 530,204 525,085 526,108

Security deposits 253,850 194,850 253,850 194,850Total 783,031 725,054 778,935 720,958Security deposits are held with a credit worthy third party. Recoverability of the deposit is highly probable.



15. OTHER FINANCIAL ASSETS



Investment in subsidiary companies at costs

- - 10,697,477 10,697,477

Total - - 10,697,477 10,697,477The above carrying amount of the fi nancial assets approximates fair value.

16. PAYABLES



Trade creditors 1,626,213 1,497,633 134,917 328,974Annual leave liability 953,103 596,861 - -Sundry creditors and accrued expenses 438,273 1,020,797 143,965 (28,842)Total 3,017,589 3,115,291 278,882 300,132

17. INTEREST BEARING LIABILITIES



CurrentUnsecured LiabilitiesLoan From Unrelated party 1,001,643 - 1,001,643 -Charge Account Liabilities 387 4,636 387 4,636

1,002,030 4,636 1,002,030 4,636

Secured LiabilitiesFinance Lease Liabilities 2,292,017 1,699,936 2,176,261 1,428,986Total 3,294,047 1,704,572 3,178,291 1,433,622

Non CurrentSecured LiabilitiesFinance Lease Liabilities 3,472,037 3,019,473 3,270,767 2,735,955

Loan from Unrelated PartyThe loan is recallable in 3 months and interest is calculated at 12% per annum.


18. SHARE BASED PAYMENTSEmployees/ DirectorsCitigold Corporation Limited has a Directors and Executive share option plan to provide an incentive for future performance and retention of key personnel.

Each share option converts to one ordinary share of Citigold Corporation Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options may be exercised at any time from the date of vesting to the date of their expiry.

The general terms and conditions of options affecting remuneration in this or future reporting periods are as follows: (All options have been issued on the same terms and conditions as the Director’s options approved at the 2006 Annual General Meeting.)

The options will have an exercise price of $0.50, vest over a period of two years, be subject to performance conditions being achieved and expire 3 years after vesting. The performance conditions are listed below.

Tranche Performance Condition Required Date Number of Options

1 Nil N/A 30%2 Share Price of $0.73 or production rate of

50,000 oz p.a.15 December 2007 35%

3 Share Price of $1.00 or production rate of 100,000 oz p.a.

15 December 2008 35%

The following shared based payment arrangements were in existence during the current and comparative reporting periods:

Option Series Number Grant Date Expiry Date Exercise Price Fair Value at grant date

1) Issued 27 November 2006 4,125,000 27/11/2006 27-Nov-09 $0.50 0.032) Issued 27 November 2006 4,812,500 27/11/2006 10-Apr-11 $0.50 0.073) Issued 27 November 2006 4,812,500 27/11/2006 27-Nov-11 $0.50 0.094) Issued 6 August 2007 1,500,000 6/08/2007 27-Nov-09 $0.50 0.115) Issued 6 August 2007 1,750,000 6/08/2007 10-Apr-11 $0.50 0.136) Issued 6 August 2007 1,750,000 6/08/2007 27-Nov-11 $0.50 0.16

The following reconciles the outstanding share options granted under the Director/Employees share option plan:

2008 2007Number of options Number of options

Balance at beginning of the fi nancial year 13,750,000 -Granted during the fi nancial year 5,000,000 13,750,000Forfeited during the fi nancial year - -Exercised during the fi nancial year - -Balance at end of the fi nancial year 18,750,000 13,750,000Exercisable at the end of fi nancial year 12,187,500 4,125,000

No share options have been exercised under the Director/Employees share option plan during the fi nancial year.

Fair Value of optionThe fair value at grant date was determined by using the Black-Scholes option pricing model that takes into account the share price at grant date, exercise price, expected volatility, option life and the risk free rate. The inputs used for the Black-Scholes option pricing model for options granted during the year were as follows:



FY 2008 FY 2007Grant Date 6/08/2007 27/11/2006Share price at grant date $0.44 $0.47Exercise price $0.50 $0.50Expected volatility 60.11% 46.98%Risk Free rate 6.36% 5.75%

The Options are granted for no consideration. Expected volatility was determined based on the historic volatility (based on the remaining life of the option), adjusted for any expected changes to future volatility based on publicly available information.

Creditors/ suppliersNo share payments were made to any creditor or supplier of the consolidated entity during the period.

19. PROVISIONS



Non Current ProvisionsEmployee benefi ts 29,442 23,428 - -Restoration and rehabilitation 507,804 507,804 507,804 507,804Deferred Income Tax 16,504,278 13,701,534 18,764,151 16,341,457

17,041,524 14,232,766 19,271,955 16,849,261

Restoration, rehabilitation and environmentalThe provision for restoration, rehabilitation and environmental work has been classifi ed as a non-current provision as the obligation to perform such work will only arise on the cessation of mining. The provision, which has not been discounted to present value, is fully funded by a cash deposit of an equal or greater amount held by the Queensland Department of Mines and Energy.

20. ISSUED CAPITAL Reconciliation of movement in issued capital of the parent entityMovements in Issued Capital 2008:

Date Details Number of Shares Issue Price $ $

Balance as at 1 July 2007 641,902,700 112,302,06423-Aug-07 Exercise of options 25,000 0.15 3,750.00 23-Aug-07 Exercise of options 80,468 0.32 25,749.76 23-Aug-07 Exercise of options 27,000 0.37 9,990.00 27-Nov-07 Share Purchase Plan 19,197,091 0.39 7,486,523.78 27-Nov-07 Share Purchase Plan 959,855 -27-Nov-07 Share placement 1,222,222 0.45 549,999.90 27-Nov-07 Exercise of options 119,150 0.15 17,872.50 17-Mar-08 Exercise of options 1,776,667 0.15 266,500.05 17-Mar-08 Exercise of options 31,250 0.32 10,000.00 30-May-08 Share placement 13,303,571 0.28 3,724,999.88

Transaction costs on share issue -39,600.00

Total movement during the year 36,742,274 12,055,786Balance for the year 678,644,974 124,357,850


Movements in Issued Capital 2007:Date Details Number of Shares Issue Price $ $

Balance at 1 July 2006 566,927,749 87,521,310 3-Jul-06 Conversion of options 1,287,500 0.15 193,12521-Jul-06 Conversion of options 433,333 0.15 65,0003-Aug-06 Ordinary share issue 10,395,875 0.32 3,326,68017-Aug-06 Conversion of options 466,584 0.15 69,9891-Sep-06 Conversion of notes 10,000 0.40 4,0005-Oct-06 Conversion of options 100,000 0.15 15,0005-Oct-06 Ordinary share issue 23,552,171 0.37 8,714,3035-Oct-06 Commission for Share Placement (62,139)1-Nov-06 Conversion of options 160,000 0.15 24,0001-Nov-06 Conversion of options 300,000 0.32 96,0005-Dec-06 Conversion of options 2,246,665 0.15 337,0005-Dec-06 Conversion of options 25,000 0.32 8,0005-Dec-06 Conversion of options 16,667 0.37 6,1678-Dec-06 Conversion of options 8,127,001 0.15 1,219,05014-Feb-07 Conversion of notes 112,500 0.40 45,0002-Apr-07 Conversion of notes 3,843,782 0.40 1,537,5132-Apr-07 Ordinary share issue 7,399,577 0.43 3,181,8182-Apr-07 Ordinary share issue 739,957 - -2-Apr-07 Conversion of options 50,000 0.15 7,5002-Apr-07 Conversion of options 10,128 0.37 3,74816-May-07 Ordinary share issue 7,317,073 0.41 3,000,00016-May-07 Ordinary share issue 487,804 - -16-May-07 Ordinary share issue 7,400,000 0.41 3,034,00016-May-07 Ordinary share issue 493,334 - -

Transaction costs on share issue (45,000)

Total movements for the year 74,974,951 24,780,754

Balance as at 30 June 2007 641,902,700 112,302,064

Share optionsThe terms, amount and number of options are as follows:

Number of options for year ended 30 June 2008:Issuing Entity Number of options Exercise Price Expiry date of Option

Citigold Corporation Limited 4,761,220 $0.32 20 July 2008Citigold Corporation Limited 6,296,917 $0.37 19 September 2008Citigold Corporation Limited 122,222 $0.45 20 November 2009Citigold Corporation Limited 5,625,000 $0.50 27 November 2009Citigold Corporation Limited 1,330,357 $0.37 14 May 2010Citigold Corporation Limited 6,562,500 $0.50 10 April 2011Citigold Corporation Limited 6,562,500 $0.50 27 November 2011

Balance as at 30 June 2008 31,260,716



Number of options for year ended 30 June 2007:Issuing Entity Number of options Exercise Price Expiry date of Option

Citigold Corporation Limited 1,920,817 $0.15 17 March 2008Citigold Corporation Limited 4,872,938 $0.32 20 July 2008Citigold Corporation Limited 6,323,917 $0.37 19 September 2008Citigold Corporation Limited 4,125,000 $0.50 27 November 2009Citigold Corporation Limited 4,812,500 $0.50 10 April 2011Citigold Corporation Limited 4,812,500 $0.50 27 November 2011

Balance as at 30 June 2007 26,867,672

Movement in share optionsThe movement in the company’s share options during the year ended 30 June 2008 were as follows:

Date Details Number of Shares Issue Price $ $

6-Aug-07 Issue of options 5,000,000 - -23-Aug-07 Exercise of options (25,000) 0.15 3,75023-Aug-07 Exercise of options (80,468) 0.32 25,75023-Aug-07 Exercise of options (27,000) 0.37 9,99020-Nov-07 Issue of options 122,222 - -27-Nov-07 Exercise of options (119,150) 0.15 17,87317-Mar-08 Exercise of options (1,776,667) 0.15 266,50017-Mar-08 Exercise of options (31,250) 0.32 10,00014-May-08 Issue of options 1,330,357 - -

Total Movement 4,393,044 333,862

Ordinary sharesOrdinary shareholders are entitled to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held. Every ordinary shareholder present at a meeting in person or by proxy is entitled to one vote on a show of hands or by poll.

Capital Risk ManagementThe Group considers its capital to comprise its ordinary share capital plus reserves.

In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a return for its equity shareholders through capital growth. In order to achieve this objective, the Group seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain a suffi cient funding base to enable the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims, either through its new share issues, or the reduction of debt, the Group considers not only its short-term position but also its long-term operational and strategic objectives.

It is the Group’s policy to maintain its gearing ratio within the range of 0 – 15% (2007: 0- 15%). The Group’s gearing ratio at the balance sheet date is shown below:




Gearing Ratio:Net debt 6,766,083 4,724,045 6,449,058 4,169,577Total equity 187,786,470 169,209,919 199,274,625 181,939,395Total capital 194,552,553 173,933,964 205,723,683 186,108,972Gearing Ratio 3.48% 2.72% 3.13% 2.24%

The increase in gearing has been brought about by the Board’s decision to take on additional debt fi nance to fund the acquisition of new mining machinery during the year; the Group intends to maintain these gearing levels going forward. There have been no other signifi cant changes to the Group’s capital management objectives, policies and processes in the year nor has there been any change in what the Group considers to be its capital.

21. RESERVES



Composition: Asset Revaluation Reserve 84,578,189 76,181,771 84,578,189 76,181,771 Capital Profi ts Reserve 571,430 571,430 - - Share Based Remuneration Reserve 1,377,575 881,521 1,377,575 881,521 Available for sale assets revaluation - - - -Total 86,527,192 77,634,722 85,955,764 77,063,292

Asset Revaluation Reserve Balance at beginning of the year 76,181,771 65,438,248 76,181,771 65,438,248 Revaluation (decrease)/ increase

during the year8,396,517 10,743,523 8,396,517 10,743,523

Balance at end of Year 84,578,189 76,181,771 84,578,189 76,181,771

Capital Profi ts Reserve Balance at beginning of the year 571,430 571,430 - - Revaluation (decrease)/ increase

during the year- - -

Balance at end of Year 571,430 571,430 - -

Share Based Remuneration Reserve Balance at beginning of the year 881,521 - 881,521 - Revaluation (decrease)/ increase

during the year496,054 881,521 496,054 881,521

Balance at end of Year 1,377,575 881,521 1,377,575 881,521





Available for Sale Reserve Balance at beginning of the year - (326,000) - (326,000) Revaluation (decrease)/ increase

during the year- 326,000 - 326,000

Balance at end of Year - - - -

Asset RevaluationThe asset revaluation reserve contains net revaluation increments and decrements arising on the revaluation of non-current assets.

Capital Profi tsUpon disposal of revalued assets, and increments standing to the credit of the asset revaluation reserve is transferred to the capital profi ts reserve.

Available for Sale ReserveThe available for sale reserve contains the gain or loss on the available for sale fi nancial assets. Amounts are removed from the reserve and recycled into profi t or loss when the available for sale asset is derecognised or impaired.

22. ACCUMULATED LOSSES



Accumulated losses at beginning of the year

(20,796,206) (13,297,582) (7,425,961) (11,504,788)

Change in Accounting Policy - - - 9,029,444Net Profi t/ (loss) attributable to members of the parent entity for the year

(2,371,672) (7,172,624) (3,613,028) (4,624,617)

Net changes in impairment from prior year - (326,000) - (326,000)Total (23,167,878) (20,796,206) (11,038,989) (7,425,961)

23. CHANGE IN ACCOUNTING POLICYIn the prior period the Company has changed the way it recognised certain inter company transactions. It is considered this amendment resulted in the fi nancial report providing reliable and more relevant information about the fi nancial performance, fi nancial position and cash fl ows of the Company.

The following equity accounts were impacted by the change in policy on the Company’s fi nancial statements for the year ended 30 June 2007

Reserves – impact was a reduction in reserves of $3,828,845

Accumulated losses – the impact reduced the accumulated losses by $9,029,442

The net impact was an overall reduction in equity in the Company’s fi nancial statements of $5,200,597

This change in accounting policy has no impact on the consolidated fi nancial report.

Reserves Continued


24. PRIOR PERIOD ERRORSa) Application of AASB 112 Income TaxesOn adoption of IFRS in 2005 the Group should have recognised a deferred tax liability in respect of revaluations of Development Property in accordance with AASB112 Income Taxes. Further in prior periods the Group has recognised its deferred tax asset through equity in the Asset Revaluation Reserve. The Group was advised that this is the incorrect treatment under AASB 112. The correct treatment is to recognise a deferred tax liability in respect to a revalued asset and to recognise a deferred tax asset to the extent that they can be offset against the deferred tax liability.

The following equity accounts have been impacted by the change in policy on the consolidated and company fi nancial statements for the year ended 30 June 2008.

Further impact of correcting the error are as follows:

Consolidated EntityTotal LiabilitiesPreviously reported 13,708,910 12,852,274Correction of error 8,363,192 8,466,696Restated total liabilities 22,072,102 21,318,970

Total EquityPreviously reported 177,573,110 189,406,091Correction of error -8,363,191 -7,466,696Restated total equity 169,209,919 181,939,395

Asset revaluation reservePreviously reported 115,517,584 108,152,321Correction of error -39,335,813 -31,970,550Restated total equity 76,181,771 76,181,771

Accumulated lossesPreviously reported -51,768,829 -31,929,815Correction of error 30,972,623 24,503,854Restated total equity -20,796,206 -7,425,961

Income Tax benefi tPreviously reported 0 0Correction of error 2,872,545 1,628,630Restated total equity 2,872,545 1,628,630

b) EPS calculationIn the prior year fi nancial report the disclosed EPS calculation included an incorrectly calculated weighted average number of ordinary shares. The correction of this error together with the impact of correcting the recognised tax benefi t results in a restatement of the EPS as follows

Prior year EPS 1.78Corrected EPS 1.18

25. FINANCIAL RISK MANAGEMENT(a) General objectives, policies and processesIn common with all other businesses, the Group is exposed to risks that arise from its use of fi nancial instruments. This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these fi nancial statements.



There have been no substantive changes in the Group’s exposure to fi nancial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

These are the principal fi nancial instruments from which fi nancial instrument risk arises:• Trade receivables • Cash at bank • Trade and other payables

Financial Instruments Consolidated The CompanyNote Year Ended Year Ended Year Ended Year Ended


Cash 1,581,300 4,371,541 1,543,897 4,806,229 Trade debtor 10 1,080 1,411 3,342,964 2,988,318 Trade debtor impairment 10 - - (3,342,864) (2,988,318) Security bonds 10 22,583 21,225 16,854 16,854 Prepayments (if these are refundable) 10 10,904 - 10,200 -Receivables 10 - - 11,231,441 11,395,870 Deposits (if refundable) 14 783,031 725,054 778,935 720,958 Loans and Receivables (Cash and Cash equivalents)

2,398,898 5,119,231 13,581,427 16,939,911

Available for sale fi nancial assets 12 1,630,000 1,956,000 1,630,000 1,956,000 Trade creditors 16 1,626,213 1,497,633 134,917 328,974 Sundry creditors and accrued expenses (exclude accrued expenses and any statutory amounts such as PAYG/Superannuation)

16 2,000 - 2,000 -

Loan from unrelated party 17 1,001,643 - 1,001,643 -Charge account liabilities 17 387 4,636 387 4,636 Finance lease liability – current 17 2,292,017 1,699,936 2,176,261 1,428,986 Finance lease liability – non current 17 3,472,037 3,019,473 3,270,767 2,735,955 Financial liabilities at amortised cost 8,394,297 6,221,678 6,585,975 4,498,551

Categories of fi nancial Instruments Consolidated The CompanyYear Ended Year Ended Year Ended Year Ended


Loans and Receivables (Including cash and cash equivalents)

2,398,898 5,119,231 13,581,427 16,939,911

Available for sale fi nancial assets 1,630,000 1,956,000 1,630,000 1,956,000Financial liabilities at amortised cost -8,394,297 -6,221,678 -6,585,975 -4,498,551Total -4,365,399 853,553 8,625,452 14,397,360


b) Credit RiskCredit risk is the risk that the other party to a fi nancial instrument will fail to discharge their obligation resulting in the Group incurring a fi nancial loss. This usually occurs when debtors fail to settle their obligations owing to the Group.

The maximum exposure to credit risk at balance date is as follows:



Loans and receivables 28,938 888,010 11,753,952 11,757,583Cash and Cash Equivalents 1,581,300 4,371,541 1,543,897 4,806,229

1,610,238 5,259,551 13,297,849 16,563,812Included in loans and receivables is a signifi cant customer, located in Australia, that accounts for 100% of trade receivables at 30 June 2008. (2007: 100%).

The maximum exposure to credit risk at balance date by country is as follows:



Australia 2,210,238 5,259,551 9,601,599 13,801,191United Arab Emirates - - 3,696,250 2,762,621

2,210,238 5,259,511 13,297,849 16,563,812

c) Liquidity riskLiquidity risk is the risk that the Group may encounter diffi culties raising funds to meet commitments associated with fi nancial instruments, e.g. borrowing repayments. It is the policy of the Board of Directors that the Treasury maintains adequate committed credit facilities and the ability to close-out market positions.

Financing arrangementsThere were no fi nancing facilities available at balance date:

Carrying Amount

Contractual Cash fl ows

< 6 mths 6- 12 mths 1-3 years > 3 years

$ $ $ $ $ $

MATURITY ANALYSIS – GROUP 2008Financial LiabilitiesTrade Creditors 1,626,213 1,626,213 1,626,213 - - -Finance lease liabilities 5,764,054 6,847,393 1,405,493 1,356,640 3,834,211 251,049Term Loan – Pal Group 1,002,030 1,002,030 1,002,030 - - -TOTAL 8,392,297 9,475,636 4,033,736 1,356,640 3,834,211 251,049

Financial AssetsTrade debtors 1,080 1,080 1,080 - - -

Loans to related parties

- - - - - -

TOTAL 153,364 153,364 153,364 - - -



Carrying Amount

Contractual Cash fl ows

< 6 mths 6- 12 mths 1-3 years > 3 years

$ $ $ $ $ $

MATURITY ANALYSIS – GROUP 2007Financial Liabilities

Finance lease liabilities 4,719,409 5,425,840 986,693 955,665 2,956,926 526,556TOTAL 6,217,042 6,923,473 2,484,326 955,665 2,956,926 526,556

Financial AssetsTrade debtors 1,411 1,411 1,411 - - -Other receivables 886,599 886,599 886,599 - - -Loans to related parties

- - - - - -

TOTAL 888,010 888,010 888,010 - - -

MATURITY ANALYSIS – COMPANY 2008Financial LiabilitiesFinance lease liabilities 5,447,028 6,462,968 1,319,072 1,304,406 3,621,241 218,249TOTAL 5,581,945 6,597,885 1,453,989 1,304,406 3,621,241 218,249

Financial AssetsOther receivables 46,937 46,937 46,937 - - -Loans to related parties

11,231,441 11,231,441 - - - 11,231,441

TOTAL 11,278,378 11,278,378 46,937 - - 11,231,441

MATURITY ANALYSIS – COMPANY 2007Financial LiabilitiesTrade Creditors 328,974 328,974 328,974 - - -Finance lease liabilities 4,064,941 4,766,242 830,216 799,189 2,742,316 394,521TOTAL 4,393,915 5,095,216 1,159,190 799,189 2,742,316 394,521

Financial AssetsTrade debtors - - - - - -Other receivables 361,713 361,713 361,713 - - -Loans to related parties

11,395,870 11,395,870 - - - 11,395,870

TOTAL 11,757,583 11,757,583 361,713 - - 11,395,870

d) Market RiskMarket risk arises from the use of foreign currency fi nancial instruments. It is a risk that the fair value or future cash fl ows of a fi nancial instrument will fl uctuate because of changes in foreign exchange rates (currency risk).

e) Interest rate riskAll loans have fi xed interest rates, cash and cash equivalents are invested at variable interest rates subjecting the interest amount received to interest rate risk. The balance in cash and cash equivalents will not drop regardless of the interest rate therefore there is no down side interest rate risk.

Financing Arrangements Continued


Sensitivity Analysis Carrying Amount AUD

+1%Profi t

-1%Profi t

$ $ $

Consolidated – 2008Cash and cash equivalents 1,581,300 15,813 - Tax charge of 30% - (4,744) -After tax increase/ (decrease) 11,069 -

The above analysis assumes all other variables remain constant.The same analysis was performed for the period ended 30 June 2007.

Consolidated – 2007Cash and cash equivalents 4,371,541 43,715 - Tax charge of 30% - (13,114) -After tax increase/ (decrease) 30,600 -Entity – 2008Cash and cash equivalents 1,543,897 15,438 - Tax charge of 30% - (4,631) -After tax increase/ (decrease) 10,807 -


Entity – 2007Cash and cash equivalents 4,806,229 4,806 - Tax charge of 30% - (1,441) -After tax increase/ (decrease) 3,364 -

f) Other price riskThe Group invests surplus cash in publicly traded shares and in doing so it exposes itself to the fl uctuations in price that are inherent in such a market. The group monitors the performance of the listed equity securities on a continuous basis

The Group’s exposure to equity price risk is as follows:

2008 ASXListed Securities $1,630,000

The group’s most signifi cant holding is in the Exploration sector which accounts for 100% of its total investments in ASX listed shares.

2007 ASXListed Securities $1,956,000


The parent entity’s exposure to equity price risk is as follows:

2008 ASXListed Security $1,630,000


2007 ASXListed Security $1,956,000

The parent entity’s most signifi cant holding is in the Exploration sector which accounts for 100% of its total investments in ASX listed shares.



Sensitivity Analysis Carrying Amount AUD

+1%Profi t

-1%Profi t

$ $ $

Consolidated – 2008Listed securities on ASX 1,630,000 163,000 (163,000)Tax charge of 30% - (48,900) 48,900After tax increase/ (decrease) 114,100 (114,100)


Consolidated – 2007Listed securities on ASX 1,956,000 195,600 (195,600)Tax charge of 30% - (58,680) 58,680After tax increase/ (decrease) 136,920 (136,920)

Entity – 2008Listed securities on ASX 1,630,000 163,000 (163,000)Tax charge of 30% - (48,900) 48,900After tax increase/ (decrease) 114,100 (114,100)


Entity – 2007Listed securities on ASX 1,956,000 195,600 (195,600)Tax charge of 30% - (58,680) 58,680After tax increase/ (decrease) - 136,920 (136,920)

The above analysis assumes all other variables remain constant.

26. COMMITMENTSFinance Leases Liabilities



Finance Lease Commitments Payable• not later than one year 2,762,133 1,942,357 2,623,478 1,629,405• later than one year but not later than

fi ve years4,085,260 3,483,483 3,839,490 3,136,837

Minimum lease payments 6,847,393 5,425,840 6,462,968 4,766,242Less future fi nance charges (1,083,339) (820,064) (1,015,940) (714,935)Total lease liability 5,764,054 4,605,776 5,447,028 4,051,308

The fi nance leases commitments are for fi nance leases over mining machinery, offi ce equipment, motor vehicles and portable items of plant. At the end of each lease, the entity has the option to purchase the equipment at a benefi cial price. The leases are on normal commercial terms and conditions and are for terms of between one and fi ve years. The group’s obligations under the leases are secured by the lessor’s title to the leased assets.


Exploration expenditure commitments The consolidated entity and the Company have the following discretionary exploration expenditure commitments in respect of exploration and mining tenements to maintain current rights of tenure. These commitments may be reduced by renegotiation upon renewal of the tenements, or by relinquishment of tenure.



Exploration expenditure commitments payable: • not later than one year 100,000 267,000 100,000 267,000• later than one year but not later than

fi ve years281,706 820,553 281,706 820,553

Total 381,706 1,087,553 381,706 1,087,553

Operating lease commitmentsOperating Lease Commitments in respect of non-cancellable operating leases contracted for but not capitalised in the fi nancial statements



Operating lease commitments payable• not later than one year 14,658 22,044 14,658 22,044• later than one year but not later than

fi ve years19,934 33,897 19,934 33,897

Total 34,592 55,941 34,592 55,941The general terms of the operating lease commitments disclosed above are: Non-cancellable leases for rental of offi ce equipment with initial terms of between 3 and 5 years. Rentals are payable monthly. The agreements do not contain escalation clauses. Options exist to renew the leases annually at the end of the lease term.

27. CONSOLIDATED ENTITIESCountry of

IncorporationOwnership

Interest2008

Ownership Interest

2007

Date of Incorporation

Charters Towers Gold Pty Ltd Australia 100 100 5 Oct 1995Charters Towers Mines Pty Ltd Australia 91.5 91.5 14 Mar 1984Charters Technology Pty Ltd Australia 100 100 13 Jan 2000Gold Management Pty Ltd Australia 100 100 28 Jan 2000Gold Projects Pty Ltd Australia 100 100 25 Jan 2000Great Mines Limited Australia 100 100 19 Mar 1984Deeprock Mining Pty Limited Australia 81.2 81.2 18 Jun 1984Citigold FZCO UAE 100 100 11 Dec 2002Queensland Gold Mines Pty Limited Australia 100 100 27 Feb 2006



28. FINANCIAL INSTRUMENTS Exposure to credit, interest rate risk and currency risk arise in the normal course of the consolidated entity’s business. No hedging of this risk is undertaken by the consolidated entity.

Fair Values



Equity Securities available for sale 1,630,000 1,630,000 1,956,000 1,956,000 Trade and other receivables 628,938 628,938 1,174,323 1,174,323 Cash and cash equivalents 1,581,300 1,581,300 4,371,541 4,371,541 Trade and other payables (2,064,486) (2,064,486) (1,496,049) (1,496,049)Non Current Assets (note 14) 783,031 725,054 778,935 720,958Non Current interest bearing assets (note 17) 3,294,047 1,704,572 3,178,291 1,433,622

SecuritiesFair value is based on quoted market prices at the balance sheet date without any deduction for transaction costs.

29. RELATED PARTY TRANSACTIONS (a) Parent entityThe ultimate parent entity within the Consolidated Group is Citigold Corporation Limited.

(b) SubsidiariesInterests in subsidiaries are set out in note 27.

(c) Key management personnelDisclosures relating to key management personnel are set out in note 34.

(d) Loans to related parties



Loans to subsidiaries

Opening balance - - 11,395,870 7,482,640Loans advance - - 24,934,565 3,913,230Loan repayments received - - (25,098,995) -

Closing balance - - 11,231,440 11,395,870

Citigold Corporation Limited has provided an unsecured, interest free loan to its wholly owned subsidiaries. An impairment assessment is undertaken each fi nancial year by examining the fi nancial position of the subsidiary and the market in which the subsidiaries operate to determine whether there is objective evidence that the loan to each subsidiary is impaired. When such objective evidence exists, the Company recognises an allowance for the impairment.


30. SUBSEQUENT EVENTS On 24 September 2008 the Company announced the placement of up to 18% of the outstanding shares to the Dubai Group for $35 million. No other matters or circumstances have arisen since the end of the year that have signifi cantly affected, or may signifi cantly affect, the operations, results of operations or state of affairs of the consolidated entity in subsequent accounting periods.

31. GOING CONCERNThe fi nancial statements have been prepared on a going concern basis. As in previous fi nancial periods, the ability of the consolidated entity to meets its expenditure commitments and progress with its development and exploration program is dependent upon production and continued capital raising.

32. CONTINGENT LIABILITIESDuring a prior accounting period, the Company entered into an agreement with the trustee of a related unit trust to pay future royalties from gold production. The consideration received for the royalties payable in the future has been recorded as revenue.

The amount and timing of the payments by the entity is contingent on a number of future events and circumstances, such as the future price of gold and the timing and amount of gold production. The effect of these circumstances cannot be accurately predicted at the date of signing these fi nancial statements. In general terms the minimum amount payable under the agreement is nil and the maximum amount payable is 1.4% of the value of 40,000 ounces of gold plus one million dollars ($1,000,000). The one million dollars is currently being repaid at the rate of $25 per ounce of gold produced.

33. SEGMENT REPORTINGThe consolidated entity operates in the mining exploration industry. Details of the mining exploration activities are set out in the review of operations. Each company within the consolidated entity operates within the one geographic area, being Australia.

34. KEY MANAGEMENT PERSONNEL DISCLOSURES a) DirectorsThe following persons were Directors of Citigold Corporation Ltd during the fi nancial year:

• J J Foley Non-executive Chairman• M J Lynch Managing Director and Chief Executive Offi cer• T V Willsteed Non-executive Director

(b) Other Key Management PersonnelThe following persons also have authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, during the fi nancial year:

• M B Martin Company Secretary and Chief Financial Offi cer• C A J Towsey Chief Operating Offi cer• G Foord General Manager Engineering• J F Lynch Site Senior Executive• R J Morrison Exploration Manager

All the above persons were also Key Management Personnel/ directors during the year ended 30 June 2007 and are all employees of the Group.



(c) Key management personnel compensation



Short term employee benefi ts 1,725,075 1,312,846 1,725,075 1,312,846Post employment benefi ts 93,895 73,502 93,895 73,502Other long term benefi ts - - - -Termination benefi ts - - - -Share based payments 496,054 881,521 496,054 881,521

2,315,024 2,267,869 2,315,024 2,267,869Further information regarding the identity of key management personnel and their compensation can be found in the Audited Remuneration Report contained in the Directors’ Report on pages 13 to 17 of this annual report.

(d) Key management personnel equity interestShares The number of shares held in the Company during the fi nancial year by each Director and each of the Key Management Personnel of the Group, including related entities, are set out below:

Balance at the start of the year

Exercise of options Other net changes during the year

Balance at the end of the year

2008DirectorsJ J Foley 4,582,988 - 16,386 4,599,374 M J Lynch 86,787,621 - 13,462 86,801,083 T V Willsteed - - - -Other Key Management PersonnelC A J Towsey 436,554 31,250 (26,076) 441,728 G Foord 551,016 - (265,000) 286,016 J F Lynch 86,787,621 - 13,462 86,801,083 R J Morrison 133,008 - - 133,008 M B Martin - - - -

2007DirectorsJ J Foley 4,800,964 - (217,976) 4,582,988 M J Lynch 86,774,613 - 13,008 86,787,621 T V Willsteed - - - -Other Key Management PersonnelC A J Towsey 365,000 - 71,554 436,554 G Foord 135,000 320,000 96,016 551,016 J F Lynch 86,774,613 - 13,008 86,787,621 R J Morrison 325,197 200,000 (392,189) 133,008 M B Martin - - - -


Options (a) Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and

conditions of the options can be found in the detailed remuneration disclosures to the Directors Report (item 11).(b) The number of options held in the Company during the fi nancial year by each Director and each of the Key Management

Personnel of the Group, including related entities, are set out below:

Balance at the start of the

year

Exercise of options

Granted during the year as

remuneration

Other changes during the year

Balance at the end of the year

Vested and exercisable at the end of the

year

2008DirectorsJ J Foley 3,000,000 - - - 3,000,000 1,950,000M J Lynch 10,000,000 - - - 10,000,000 6,500,000T V Willsteed 750,000 - - - 750,000 487,500

Other Key Management PersonnelC A J Towsey 62,000 (31,250) 1,000,000 - 1,030,750 680,750G Foord 65,000 - 1,000,000 - 1,065,000 715,000J F Lynch - - 1,000,000 - 1,000,000 650,000R J Morrison - - 1,000,000 - 1,000,000 650,000M B Martin - - 1,000,000 - 1,000,000 650,000

2007DirectorsJ J Foley - - 3,000,000 - 3,000,000 900,000M J Lynch - - 10,000,000 - 10,000,000 3,000,000T V Willsteed - - 750,000 - 750,000 225,000

Other Key Management PersonnelC A J Towsey - - - 62,000 62,000 62,000G Foord 320,000 (320,000) - 65,000 65,000 65,000J F Lynch - - - - - -R J Morrison 200,000 (200,000) - - - -M B Martin - - - - - -

LOANS TO DIRECTORS OR KEY MANAGEMENT PERSONNELNo loans were granted to any directors or other key management personnel of the Company and the group during the period ending 30 June 2008.


In the opinion of the directors of Citigold Corporation Limited

a) The fi nancial statements and notes set out on pages 23 to 60 are in accordance with the Corporations Act 2001 including: (i) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting

requirements; and (ii) giving a true and fair view of the Company’s and consolidated entity’s fi nancial position as at 30 June 2008 and of

their performance, as represented by the results of their operations and their cash fl ows, for the fi nancial year ended on that date; and

b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and

c) The remuneration disclosures included in pages 13 to 17 of the Directors’ Report (as part of the Remuneration Report), for the year ended 30 June 2008, comply with section 300A of the Corporations Act 2001; and

d) there are reasonable grounds to believe that the company and the group entities identifi ed in Note 39 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those group entities pursuant to ASIC Class Order 98/1418.

The directors have been given the declarations by the Chief Executive Offi cer and Chief Financial Offi cer for the fi nancial year ended 30 June 2008 pursuant to Section 295A of the corporations act.

This declaration is made in accordance with a resolution of the directors.

J J Foley M J LynchChairman Director

Sydney30 September 2008

DIRECTORS’ DECLARATION


INDEPENDENT AUDITOR’S REPORT


ASX ADDITIONAL INFORMATIONAdditional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this Report.

1. SHAREHOLDINGS AS AT 30 SEPTEMBER 2008Distribution of members and their holdings:

Range Total Holders Units1 - 1,000 1,237 555,938

1,001 - 5,000 1,973 5,893,5125,001 - 10,000 1,334 11,110,051

10,001 - 100,000 3,638 130,868,107100,001 - and over 862 530,217,366

Total 9,044 678,644,974

2,018 shareholders have less than a marketable parcel of ordinary shares.

Twenty largest shareholders Name Number of

Shares% of Issued

Share Capital

Aurora Investments Limited 68,534,983 10.10%Citicorp Nominees Pty Limited 48,298,769 7.12%National Nominees Limited 17,349,798 2.56%ANZ Nominees Limited 14,961,162 2.20%JFO Investments Ltd 13,703,879 2.02%HSBC Custody Nominees

(Australia) Limited12,493,021 1.84%

Mr Ian Robert Mcpherson + Mrs Ann Elizabeth Mcpherson

10,086,276 1.49%

Underwriting & Mining Investment Corporation Pty Ltd

9,707,732 1.43%

J P Morgan Nominees Australia Limited

9,549,341 1.41%

Rosa And Sons Investments Pty Ltd

9,275,382 1.37%

Mr Sidney John Reynolds + Mrs Antoinette Marie Rees

8,932,563 1.32%

Mr William Jangsing Lee 7,565,132 1.11%John Francis Lynch 5,669,090 0.84%Miss Lily Lee 5,500,000 0.81%Mr John Cunningham Mcbride 4,111,392 0.61%Dr William Roney +

Mr Stephen Roney3,902,598 0.58%

Mr Jeffrey Anthony Somers + Mrs Jill Somers

3,680,474 0.54%

Prime Impact Pty Ltd 3,529,554 0.52%Bill Ford Nominees Pty Ltd 3,382,834 0.50%Dr Jayson Wayne Oates 3,328,545 0.49%

263,562,525 38.84%

Substantial shareholders – Shareholders appearing on the Company’s register of substantial shareholders as at 30 September 2008 are Aurora Investments Limited who hold 68,534,983 ordinary shares representing 10.1% of issued shares.

Voting rights – All shares carry voting rights of one vote per share.

2. RESTRICTED SECURITIESAt the time of this report there are no ordinary shares classifi ed as restricted securities

3. ON MARKET BUY BACKThere is no current on-market buy back.

4. SUMMARY OF MINING TENEMENTS & AREAS OF INTEREST AS AT 30 SEPTEMBER 2008The Consolidated Entity has 100% control of the following mining tenements at Charters Towers:

Exploration Permit Minerals

EPM 11658 EPM 13453 EPM 15964 EPM 15966Exploration Permit Minerals Application

EPMA 16979Mineral Development Licence

MDL 116 MDL 118 MDL 119 MDL 251Mineral Development Licence Application

MDLA 252Mining Lease

ML 1343 ML 1429 ML 1548 ML 10093ML 1344 ML 1430 ML 1549 ML 10193ML 1347 ML 1431 ML 1585 ML 10196ML 1348 ML 1432 ML 1586 ML 10208ML 1385 ML 1433 ML 1587 ML 10222ML 1387 ML 1472 ML 1735 ML 10281ML 1398 ML 1488 ML 10005 ML 10282ML 1407 ML 1490 ML 10032 ML 10283ML 1408 ML 1491 ML 10042 ML 10284ML 1409 ML 1499 ML 10048 ML 10285ML 1424 ML 1521 ML 10050ML1428 ML 1545 ML 10091Mining Lease Application

MLA 10335

0808 citigold annual report - kitco · historically mined brilliant day dawn lode that averaged 38...

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