CITIGOLD CORPORATION LIMITED — Call Transcript 2009

Aug 25, 2009

ASX Company Announcements Proactive Investors Q&A with CEO® Citigold Corporation Limited CEO Mark Lynch

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 5] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 5] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 5] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [150 x 4] intentionally omitted <==

==> picture [146 x 31] intentionally omitted <==

Mr. Mark Lynch Chief Executive Officer Citigold Corporation Limited Level 15, IBM Center, 348 Edward St, Brisbane, Qld, 4000 AUSTRALIA

Date: 11 August 2009

Title: Proactive Investors Q&A with CEO® on Citigold Corporation & Charters Towers Update

Interview transcript:

Proactive Investors:

Can you indicate how many shareholders Citigold had as at June 2009? Has there been a net increase or decrease in shareholders over the past year?

CEO Mark Lynch

We have 11,000 shareholders now and that is an increase of 1,500 since September 2008. Essentially all of these new shareholder investors have joined us through the ASX and we are proud to have each as a member of the Citigold family.

Since formation of the company we have taken the time to talk to shareholders whether they are institutions or retail investors. They are all owners of the business and that is important to us. We are predominantly a retail shareholder friendly company.

Proactive Investors:

Recently, Citigold raised over $17 million in two announcements from investors. Can you indicate the reasoning behind the private placement, options issued and the use of the funds raised?

CEO Mark Lynch

1

The purpose of the fund raisings were for further expansion of the Charters Towers gold operations. This is a very large gold deposit and the investment is focused on expanding the underground mining operations so that more ounces can be delivered to the mill. Previously, we have raised capital through private placements and a share purchase plan such as this provides a large section of our shareholders with the ability to increase their shareholding at a discount and no brokerage. The unlisted options are a sweetener that appeals to some shareholders and secures the Company further funds in the future when they are exercised.

Proactive Investors:

The Share Purchase Plan (SPP), with a free bonus loyalty share, was a big success and exceeded budget. What was the rationale behind the SPP?

CEO Mark Lynch:

The SPP is a user friendly way of raising capital where both the Company and investors benefit, as it is low cost and efficient. Other capital raisings can require expensive paperwork and or commissions that can reduce the money available to be invested in growing the business. When a shareholder has decided to become an owner in our business, we would like them to stay with us and therefore seek out the best ways to offer them further share holdings. The SPP has the greatest benefit for smaller shareholders because they can increase their holding proportionally more. The bonus shares are also an incentive. The result is that we have been able to raise most of our capital for growth internally from our own shareholders.

Proactive Investors:

Will the proceeds from the placement and SPP be sufficient to provide a “bridge” to take the company to cash flow positive from gold production ramp-up in 2009/10?

CEO Mark Lynch:

That is the aim. In 2008 we had budgeted $35 million to be raised and to date we have raised over $25 million. The planned gold production for 2009 calendar year is 25,000 ounces and this sees us cash flow positive.

Proactive Investors:

In the June quarterly report, there was a decrease in ounces produced, can you comment on that? And also on the $6.9 million in development cost for the quarter?

CEO Mark Lynch

Although disappointing the amount of ounces produced during the June quarter did not meet target due to an area of the WS16 ore block not being mined as scheduled. The difference is less than 3% of the 2009 target and should be made up in the second half of 2009.

The $6.9 million cash spent during the quarter on development should not be directly credited to an increase in costs but rather an increase in work done. . It should be noted that almost one third of all development tonnes mined in the 2008/09 financial year were mined in the June quarter.

2

Proactive Investors

Citigold has provided gold production targets from Charters Towers that were not able to be met for a variety of reasons. Can you explain to investors (particularly those with a non-geological background) the reasons why this occurred?

CEO Mark Lynch:

At any particular time we had confidence in the planned growth. We have a key goal to become a large, cash positive gold producer. We have always maintained that another goal is to invest shareholder funds wisely and efficiently, therefore we may have moved slower than others might have in our position.

This slow expenditure also means that we do not just throw money at a challenge. The gold deposit is a large one. We didn’t want to throw huge investments into it and get it wrong and destroy shareholder value, and effectively, future support. Therefore we have been thorough and meticulous in our due diligence to ensure that when we commenced production, we knew exactly what we were dealing with. The mining, exploration and gold production our technical and mining team has done over the last two years has us now ready to grow from a stronger understanding of the ore body. At all times the project has moved forward and the key goal is still well within our sights.

Proactive Investors:

In the March 2009 quarterly, Citigold provided a short term quarterly gold production plan of annual gold production of 25,000 ounces in 2009; 85,000 ounces in 2010 and 160,000 ounces in 2011. The ramp-up is considerable relative to current production. Are these targets based on the staged development of the Warrior, Brilliant, Sunburst, and Day Dawn reefs? Can you indicate how these targets are likely to be met and the confidence level behind them?

CEO Mark Lynch:

The ore planned to be mined in 2009 is already drilled and the development of the tunnels to access the ore are well underway. Over the last two years at Warrior, we have developed a mining method and attack plan suited to our Charters Towers gold deposit. The mining method has evolved into a more efficient method to what we started with two years ago.

This same design strategy will be used for the Brilliant, Sunburst and Day dawn Reefs. The production growth in 2010 will be from Warrior and the Imperial reefs. The Sunburst, Brilliant and Day Dawn are all planned to be accessed from the Central (second) decline and therefore will share common infrastructure and follow in succession. Budgets show that growth above 50,000 ounces a year can be all internally funded from gold production cash flow.

Proactive Investors:

There is a relatively low proportion of the resource in indicated and measured categories and reserves. Can you comment?

CEO Mark Lynch:

3

The nature of our gold deposit means that a lot of drilling is required to obtain the data to move the inferred resource into the indicated or measured category. We have five coring drills rigs working on the data collection process, but it is slow. An important aspect of the overall inferred resource is that the geological team has already applied a 70% discount to the tonnage thereby giving a conservative estimate in the 10 million ounces. We expect that over time 80% of the resource will convert to a reserve.

Proactive Investors:

Mark, it was indicated in the quarterly that the management team has confidence in reaching the longer term goal of 300,000 ounces of gold production per year. What provides the team with that confidence and excitement so that investors can share that optimism and vision your team has for the project?

CEO Mark Lynch

The work we have done and continue to do at Charters Towers supports that the gold deposit is large and capable of supporting 300,000 ounces a year of gold production. The Warrior reef is shaping up to be similar to the large City reefs that historically produced over 6 million ounces of gold.

To date, we still have only explored a small part of the reef and are working with the latest geophysics techniques and technology to accelerate drilling by looking ‘outside’ and ‘between’ the drill holes which could demonstrate a lot of upside. We plan to accelerate the mine planning data collection as using drilling only is relatively slow. We know what we have to do the reach the goal and have budgeted for the work to be done.

Proactive Investors

With an inferred mineral resource of 10 million ounces (331 tonnes) at an average grade of 14 g/t gold, to JORC reporting standards, Citigold has always appeared “undervalued” relative to its market capitalisation and peers. In your opinion, when will this likely change?

CEO Mark Lynch

I agree with you. It is reasonable expect that as the gold production grows that there would be a substantial and sustained lift in our market capitalisation. We have the gold asset to build a large and valuable corporation.

Proactive Investors

The Charters Towers goldfield is classified as a “bonanza deposit”. What exactly is this and why is this distinction important?

CEO Mark Lynch:

A “bonanza deposit” is a deposit of over 5 million ounces at a grade of 10 g/t or greater. The goldfield has already produced 6.6 million ounces from 38 g/t ore. This sets the deposit apart from the bulk tonnage low grade deposits. These deposits are often long life deposits with deep roots into the earth’s crust.

Proactive Investors:

Gold resources in Charters Towers are contained in veins and require a higher level of accuracy to

4

intercept vein structure and cut rock containing gold deposits. How significant a factor has this been in hindsight?

CEO Mark Lynch:

The goldfield has over 40 years of past mining and is well understood. The structures/fractures that contain the gold are also recognised and very consistent. The challenge is that the gold is unevenly distributed in the giant fractures and therefore about 30% of the fracture historically produced mineable gold grades. Therefore a lot of drilling is required to define the areas to be extracted.

Proactive Investors:

The Charters Towers mineralisation comprises reef structures approximately one metre thick, of strike lengths from several hundred metres up to two kilometres, and a vertical continuity to at least 1,200 metres. Care to comment?

CEO Mark Lynch:

Yes they are very large and planar in shape. Like big sheets or blankets. Therefore we need to focus on the high grade areas and we do this with drilling. Two years ago we made the decision to acquire five electric drill rigs so that we could efficiently and consistently drill.

In addition over the last year we have been testing various geophysical methods to help the geologists “see” between the drill holes. This aims to help map the high grade areas faster. This will allow the drilling to be more productive and convert resources into reserves faster. Equipment miniaturisation has advanced a lot in recent years and very sophisticated instruments can now go down small drill holes. I believe within 6 months we will have optimised the best combination of geophysical techniques and software for our gold deposit. Currently we are working with leading firms in Australia and internationally.

Proactive Investors:

The superior resource grade at Charters Towers provides a major competitive advantage with respect to unit operating costs. When do you estimate that mining costs will fall to targeted $350 per ounce?

CEO Mark Lynch:

Our budgets show that costs will fall to these levels as we approach production of 100,000 ounces a year.

Proactive Investors:

The current drilling program would seem to offer potential for significant extensional exploration success, judging by the new high grade zone in the Warrior ore body?

CEO Mark Lynch:

Yes. The work at Warrior is excellent. The focus is currently converting gold resources to be mined rather than increasing the 10 million ounces. As the project gold production expands there will be the opportunity to expand the overall gold resource.

5

Proactive Investors:

There has been extensive vertical and lateral development expenditure in the mines. How much is this still a factor?

CEO Mark Lynch:

Vertical and lateral development will always be an important part of what we do. A lot of gold comes out of relatively small areas and therefore the actual stopping is relatively low cost per ounce. But there are a lot of underground roadways to be dug and all these costs are picked up and included in the $350/ounce.

Proactive Investors:

Citigold has attempted to “de-risk” through parallel development of South and Central Areas, mitigating the risks associated with a single mine operation. Care to comment?

CEO Mark Lynch:

To increase gold production we need multiple mining areas underground and plan to have two separate but adjacent underground operations so that a consistent ore supply is maintained. The Warrior is one operation and the Central area (Sunburst, Brilliant and Day Dawn reefs) is the other. The Central area is not being actively worked however it is planned to be re-activated by 2010. The Central area has an established decline tunnel access down to 238 meters vertical depth and major surface infrastructure (power, water, workshops, ore storage, permits) in place.

Proactive Investors:

Extensive exploration potential may reside in un-drilled parallel reefs and below 1,200 meters depth. Geological studies strongly indicate gold-bearing structures 3,000 meters deep. Recent high grade assay results returned 1.5 meters at 161 g/t gold and the discovery of a large gold nugget weighed 48 grams (one and half ounces). This was found below the surface near the Imperial Reef. Does this indicate there could also be exploration upside for shareholders of Citigold. Have these discoveries surprised you?

CEO Mark Lynch:

Yes there is substantial upside in the gold deposit. Our geologists believe the upside is of the goldfield is 50 million ounces. But there is a huge amount of exploration work to turn this target into a reality. At present we are focused on lifting gold production. The high grade assays are to be expected but the large nugget is unusual. This goldfield is not known for nuggets so this was a very special find. The original discovery was from surface nuggets so it may be a good sign for the Imperial reef potential.

Proactive Investors:

Can you update on progress on the Deep Hole project drilling? This is located on the north-eastern side of the City, near the Racecourse. Previously, this was considered to be highly prospective for significant additions to the gold resource.

CEO Mark Lynch:

The deep hole was always a ‘wild cat’ hole that was primarily aimed at proving the gold bearing structures extend to great depth, any high grade gold intersection would have been a fabulous bonus. It

6

was a success and proved that the structures continue very deep so the channel ways should contain economic gold. More drilling will be carried out in future but it is not a high priority at this time. The drill hole has been properly capped for future reuse to do further wedge holes at depth or possibly geophysics.

Proactive Investors:

Power at the Charters Towers Warrior mine has been a major impediment to achieving planned mine production in the past. Despite these types of issues, the company has continued to move the project ahead. To what extent will the recent power upgrade translate to increased gold production?

CEO Mark Lynch:

The power upgrade allows us to get the necessary men and equipment underground to do the necessary capital and production works. The increased gold production to follow later in calendar 2009 is a result of this upgrade. The milling operation has separate and larger power connect to that site.

Proactive Investors:

It would appear the investment in plant and equipment alone may equal or exceed the current valuation of the company. To what extent do you think larger companies could be eyeing a large high grade resource with significant sunk expenditure?

CEO Mark Lynch:

An interesting perspective. There seems to be a lot of miss-information in the marketplace about Citigold, including that our deposit are similar to the well known Victorian big goldfields and that we may suffer similar difficulties that Harmony and Lihir faced, and therefore walked away from.

Our deposit has its challenges and we are working through them. The uneven distribution of gold in the fractures takes a lot of getting one’s mind around. When we opened up Warrior it looked different to what we thought and therefore we changed how we attacked it. The high grades and mineral characteristics displayed in the central reefs were the same. But the very high localised grades had not shown up in the drilling. I guess the difference is that despite all the detailed old plans reopening the old workings and trial mining the cross-reefs, to now actually see the ore in situ in the east-west reefs was amazing. Good, but different. As gold production grows, those watching will see that we are different from the others. Possibly someone is waiting to lets us do all the hard work first and prove large scale mining!.

Proactive Investors:

Over the past five years, Citigold has acquired the 10m oz gold deposit, built the process plant, tailings dam, major underground and surface works in the City and at Warrior, completed large drilling program, environmental permits, mining licenses, power, water, machinery and equipment fleets etc - all for approximately $150 million. With the recent fall in the share price, extracting a return in the near term has been challenging for investors. To what extent do you believe that markets forget how long it takes to build a large scale, major gold mine, especially for a junior mining company? Lihir comes to mind in its early stages?

7

CEO Mark Lynch:

Markets do forget. There are always a few bright stars that shoot up but for most it is hard work over many years. We started in earnest in 2004 and have come a long way. Some peer projects started in the 1980’s. I was told that the precursor to the great Western Mining Corporation spent 30 years as a minnow before it made the big time. At Citigold, we are not in the instant gratification business, we are building a large gold production operation. This gold business is unique in that I believe it will have the capacity to pay substantial dividends for decades. Some smaller gold companies that may have a steady cash flow rarely can pay dividends because their deposits are small and they need to keep ‘buying’ more gold in the ground to stay in business. With a very large long life deposit and a focus on low operating costs then it may be possible to spin of 25% of cash flow back to the owners.

Proactive Investors:

How do you see the gold price 6, 12 and 18 months out? With the fall in the Australian dollar, it has proven a bonanza for Australian gold producers. Despite this, there a number of local producers that do not seem to be valued at anywhere near their intrinsic value at current prices, relative to overseas brethren. What’s your take on this?

CEO Mark Lynch:

The current gold price around A$1100 per ounce is fine. Yes when our dollar fell the price hit A$1500 which was excellent. Going forward I believe the price will remain strong in US$ and move up over time. It may have more or less volatility depending on what the little A$ does. Overseas companies may have very large marketing budgets and work hard in that area spruiking the story. Possibly Aussies prefer to get the job done and let the results speak for themselves. Or maybe our institutions are too conservative or short sighted. The tussle for Mt Isa Mines some years back was interesting. The individual shareholders often wanted to keep the company in Australia and hold their shares but the institutions want a fast dollar and move on. Patient investment can produce good returns over the long term.

Proactive Investors:

Citigold does not undertake any hedging of the gold production. What is the company’s policy on hedging?

CEO Mark Lynch:

We have no plans to hedge. Hedging is dangerous in a volatile market. One can be underwater very quickly. We believe it is best to focus on cost reduction in operations. Some companies made money in the 80’s and 90’s from hedging but times have changed.

Proactive Investors:

Which types of gold producers would you be happy to draw a comparison with now? And hope to emulate in one-two years time?

CEO Mark Lynch:

8

There are some great mines hiding inside big companies. Goldcorp has built a great business from scratch which is impressive. They had a great deposit, developed it, made a lot of money and grew from there. Does Charters Towers have the potential to produce 300,000 ounces of gold a year? Yes. Its historically done it before. That is the goal we are going after.

® Mark, thank you for participating in this Proactive Investor Q&A with CEO .

For further information on Citigold Corporation Limited visit www.citigold.com or call Mark Lynch + 617 3834 0000.

For further information on Proactive Investors visit www.proactiveinvestors.com.au and its global investor community.

9