Citigold : 28 October 2016 Annual Report to Shareholders

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OUR MISSION

Become a true Ultra-low Cost gold producer using state of the art technologies and efficiencies. All with the aim of returning substantial profits to shareholders in harmony with the local environment

CONTENTS

Business Overview 1

Corporate Directory 1

Chairman's Letter 2

Review of Operations 3

Directors' Report 15

Auditors Independence Declaration 21

Consolidated Statement of Profit or Loss and other Comprehensive Income 22

Consolidated Statement of Financial Position 23

Consolidated Statement of Changes in Equity 24

Consolidated Statement of Cash Flows 25

Notes to the Financial Statements 26

Directors' Declaration 43

Auditors Report 44

ASX Additional Information 48

BRISBANE

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2016 Annual Report | 1

BUSINESS OVERVIEW CORPORATE DIRECTORY

Citigold Corporation Limited (Citigold) is an Australian gold mining and exploration company, operating the wholly owned Charters Towers goldfield in north east Australia, 1,000 kilometres north of Brisbane, Queensland, and 130 kilometres south west from the major coastal port of Townsville.

The Company's prime focus is the Charters Towers Gold Project. The Project comprises 100% control of the 11 million ounce gold deposit, with an Inferred Mineral Resource of 25 million tonnes at 14 grams per tonne gold and 620,000 ounces of gold in the Probable Ore Reserve (2.5 Mt @ 7.7 g/t Au at a 3 g/t cut-off).

The Charters Towers Project still remains one of Australia's largest high grade pure gold deposits.

The Company does not require additional mine acquisitions to sustain long term gold production. Citigold has already invested over $200 million in acquiring the gold deposit, developing the infrastructure and mines at Charters Towers. Trial mining operations have produced over 100,000 ounces of gold.

The development fundamentals remain robust with the gold production plan having an initial target of 50,000 ounces per annum building up to over 220,000 ounces of gold production per annum in year 5. In order to move back into gold production we continue to plan for the resumption of mining gold at Charters Towers.

The Company is seeking to raise circa $100 million. The use of funds is principally to complete the underground capital expenditure program to facilitate the gold production target of 222,000 annual ounces. The business plan and capital expenditure program shows gold production to commence within 10 months of the injection of the required capital.

The Charters Towers gold deposit is large and forecasts show that it has the potential to generate substantial positive cash flows for decades. This will help generate large returns for all shareholders over time.

CORPORATE OFFICE & PRINCIPAL PLACE OF BUSINESS

Suite 23, 86 Brookes Street,

(PO Box 1133)

Fortitude Valley, QLD, 4006, Australia

Telephone: [phone] Email: [e-mail]

REGISTERED OFFICE

30 Nagle Street Charters Towers, QLD, 4820, Australia

CHARTERS TOWERS MINE SITE

Clermont Highway, PO Box 10, Charters Towers, Qld, 4820, Australia

Email: [e-mail]

DIRECTORS

Mark Lynch (Executive Chairman) John Foley (Non-Executive Director)

Arun Panchariya (Non-Executive Director) Dr Sibasis Acharya (Non-Executive Director)

COMPANY SECRETARY

Niall Nand

STOCK EXCHANGE LISTING

Australia (ASX) Code 'CTO'

SHARE REGISTRY

Computershare Investor Services 117 Victoria Street,

West End, QLD 4000 Telephone: [phone]

AUDITOR

KS Black & Co

Level 6, 350 Kent Street

Sydney NSW 2000

BANK

Westpac

2016 Annual Report | 1

CHAIRMAN'S LETTER

Dear Shareholder,

During the 2016 Financial Year, the focus continued to remain on securing a long term major strategic funding partner. Citigold is very persistent and very determined. Discussions continue with several major strategic funding partners in developing the production ready Charters Towers Gold Project. The past financial year has seen an improvement in the gold price indicating an increase appetite for gold by investors.

The past year has seen the Company further refine its development strategy, and innovation plans, that aim to optimise the asset at Charters Towers and become an ultra-low cost gold producer. Additionally, these savings will include reducing the already relatively small environmental surface footprint of the mine. We have also continued to reduce recurring corporate overheads during the 2016 financial year with results to be reflected in the coming 2017 financial year.

The Charters Towers Project still remains one of Australia's largest high grade pure gold deposits. Trial mining operations in previous years have produced over 100,000 ounces of gold to date. The development fundamentals remain robust with the gold production plan having an initial target of 50,000 ounces per annum building up to over 220,000 ounces of gold production per annum in year 5. In order to move back into gold production we continue to plan for the resumption of mining gold at Charters Towers.

Strategic mining review during the year resulted in the expected lead time to gold production from re-commencement of Charters Towers operations being shortened to 10 months. This assessment was made possible by the geological work over the last 3 years, planning sessions, the rethinking of lead-time constraints and the commercial benefits imperatives for an incoming financing partner.

The large production ready asset at Charters Towers requires a substantial investment each year to maintain and hold the asset. Therefore, we are looking forward to moving the asset back towards gold production in the 2016-17 financial year. Investors remain positive about realising the true unrealised value of the Charters Towers Gold Project.

I thank our shareholders for the continued strong support of the Company as it implements its ultra-low cost vision in it's strategic business plan. Also, thank you to our dedicated team of professionals at Charters Towers and elsewhere. Your passion and commitment is appreciated.

Sincerely,

Mark Lynch Executive Chairman

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