Ann: Citadel's March Quarterly Activities Rep, page-9

re: Ann: Citadel's March Quarterly Activi... No Ruddy tax on Citadel Resources' planned Saudi mine.

Andrew Main From: The Australian May 25, 2010

IT might have been months late in coming but Ines Scotland's Citadel Resource Group has been awarded a mining licence by the Saudi Arabian government to start its planned copper/gold/silver mine at Jabal Sayid.
Citadel plans to produce about 57,000 tonnes a year of copper in concentrate with a gold and silver pay thrown in.

In case our Treasurer and Prime Minister are watching, Citadel pointed out yesterday that "there are no mineral royalties payable and the corporate tax rate is 20 per cent". Oh, and the ground rent is $3200 a year per square kilometre.

However, it's worth pointing out that Citadel's equal joint venture partner is a Saudi family-owned group called Consolidated Mining Company Investments (CMCI) that got its foot on Jabal Sayid first. Still, they're both doing better than the unidentified French company that drilled it all up in the 1970s but never went ahead. We understand that Saudi Arabia had a difficult mining regulatory environment until a new Mining Act was brought in, in 2005. The bankable feasibility study for Jabal Sayid was completed in December but the licence took a while to come through.

You could forgive the delay: this will be the first copper mine in Saudi Arabia.

Jabal Sayid is 350km northeast of Jeddah and, to quote Citadel, "is connected to Jeddah and the Red Sea port of Yanbu by multi-lane sealed highways".

RBC analyst Geoff Breen, who likes the project, says the mine will need capital expenditure of $US280 million ($337m) -- stand by for a capital raising -- and that cash costs will be about US97c a pound. On the same measure, copper's currently worth about $US3 a pound. Citadel shares climbed 3c to 34c before closing at 33.5c.

http://www.theaustralian.com.au/business/city-beat/