Capital Gold Announces a Major Increase in Gold Reserves at the El Chanate Mine, Sonora, Mexico



    
    Proven and Probable Reserves are Now 832,000 Ounces of Gold, Up 70%
    

    NEW YORK, Sept. 4 /CNW/ -- Capital Gold Corporation (TSX: CGC; OTC
Bulletin Board: CGLD) is pleased to announce a major increase in the proven
and probable gold reserves at its El Chanate Gold Mine in northwestern Sonora,
Mexico.
    In announcing the results of the 8,300 meter reverse circulation drilling
campaign that was initiated in February, Capital Gold Chairman Gifford
Dieterle said "We are absolutely thrilled with the new numbers. The El Chanate
gold reserve is now 832,000 ounces, an increase of 70 percent from the
previously stated reserve of 489,000 ounces.  Similarly, the recoverable gold
ounces have increased by 67 percent from 332,000 to 556,000 ounces." The
following table provides the details:

    Mineral Reserve Class    Ore (tonnes)   Grade (g/t)  Contained Gold (oz.)

    Proven Mineral Reserve   26,693,000       0.68           581,000

    Probable Mineral Reserve 12,768,000       0.61           251,000

    
    Proven and Probable
     Mineral Reserve         39,461,000       0.66           832,000
    
    "We are now a different company," Dieterle added. "This reserve increase
will enable us to extend the life of the El Chanate mine from seven to eleven
years under the revised mine plan. This will accelerate our ability to grow
the company." Additionally, the company believes that the deposit is still
open to the east and at depth.
    The proven and probable reserve tonnage has increased by 97 percent from
19.9 million to 39.5 million metric tonnes with a gold grade of 0.66 grams per
tonne. The open pit stripping ratio is 0.6:1 (0.6 tonnes of waste to one tonne
of ore).  The mineral reserve is based on an updated resource block model and
an updated mine plan and mine production schedule developed by Independent
Mining Consultants, Inc. (IMC) of Tucson, AZ. The updated pit design for the
revised plan is based on a plant recovery of gold that varies by rock types,
but is expected to average 66.8%. A gold price of US$550 (SEC three year
average as of July 31, 2007) per ounce was used to re-estimate the reserves
compared with a gold price of $450 per ounce used in the previous reserves.
The stated proven and probable mineral reserves have been prepared in
accordance with Canada's National Instrument 43-101 Standards of Disclosure
for Mineral Projects and are equivalent to proven and probable reserves as
defined by the United States Securities and Exchange Commission (SEC) Industry
Guide 7. The qualified person, as defined by National Instrument 43-101, for
this mineral reserve/mineral resource update is Michael G. Hester, FAusIMM of
IMC.

    The following table shows the mineral resource net of the mineral
reserve.

    Mineral Resource Class     Ore (tonnes)  Grade (g/t)  Contained Gold
(oz.)

    Measured Mineral Resource    10,256,000   0.602            199,000

    Indicated Mineral Resource   29,799,000   0.685            656,000

    
    Measured & Indicated Mineral
     Resource                    40,055,000   0.664            855,000
    
    The measured and indicated mineral resource, net of the mineral reserve,
amounts to 40.1 million ore tonnes at 0.66 g/t gold for 855,000 contained
ounces of gold.  Inferred mineral resource is an additional 5.6 million tonnes
at 1.01 g/t gold for 181,000 contained ounces. There is no guaranty that
inferred mineral resource will be upgraded to measured or indicated resource
or mineral reserve. This mineral resource is based on a gold price of US$ 650
per ounce and a 0.3 g/t gold cutoff grade and assumes open pit mining and heap
leaching of the ore.  To comply with the "reasonable prospects for economic
extraction" clause of the Canadian definitions of mineral resources the stated
mineral resource is contained in a floating cone shell.
    Gold production at El Chanate is currently near the feasibility study
rate of 4,000 ounces per month. John Brownlie, COO said "I am very proud of my
team at El Chanate. To achieve the feasibility study production rates after
only a month in operation, is a testament to their skill and dedication to the
project. We will slowly start to ramp up processing rates from 7,500 tonnes
per day (tpd) to 10,000 tpd. This should boost our gold production toward
5,000 ounces per month and 60,000 ounces per year". Brownlie adds: "With this
reserve increase, we will now be analyzing what steps we need to undertake to
effectively increase production rates and improve gold recoveries by
conducting further metallurgical test work at our laboratory facilities at the
mine". He also added that "Initially the increased plant throughput would not
require any capital expenditures since additional ore crushing and stacking
capacity had been built into the original design."
    All of the above resource estimates reported by the Company were
calculated in accordance with the Canadian National Instrument 43-101 and the
Canadian Institute of Mining and Metallurgy Classification system. These
standards differ significantly from the requirements of the U.S. Securities
and Exchange Commission. Mineral resources which are not mineral reserves do
not have demonstrated economic viability.
    
    About Capital Gold
    
    Capital Gold Corporation (CGLD:CGC) is a gold production and exploration
company.  Through its Mexican subsidiaries and affiliates, it owns 100% of the
El Chanate gold property in Sonora, Mexico. Further information about Capital
Gold and the El Chanate Gold Mine is available on the Company's website,
www.capitalgoldcorp.com.
    Statements in this press release, other than statements of historical
information, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results may differ materially from those projected or suggested due to certain
risks and uncertainties, some of which are described below.  Such forward-
looking statements include comments regarding the establishment and estimates
of mineral reserves and non-reserve mineralized material, future increases in
mineral reserves, the recovery of any mineral reserves, grade, processing
rates and capacity and potential mine life, estimated gold production and
future growth of the company.  Factors that could cause actual results to
differ materially include timing of and unexpected events during construction,
expansion and start-up; variations in ore grade, tonnes mined, crushed or
milled; delay or failure to receive board or government approvals; the
availability of adequate water supplies; mining or processing issues, and
fluctuations in gold price and costs.  There can be no assurance that future
developments affecting the Company will be those anticipated by management.
    Any forecasts contained in this press release constitute management's
current estimates, as of the date of this press release, with respect to the
matters covered thereby.  We expect that these estimates will change as new
information is received and that actual results will vary from these
estimates, possibly by material amounts.  While we may elect to update these
estimates at any time, we do not undertake to update any estimate at any
particular time or in response to any particular event.  Investors and others
should not assume that any forecasts in this press release represent
management's estimate as of any date other than the date of this press
release.  Additional information concerning certain risks and uncertainties
that could cause actual, results to differ materially from that projected or
suggested is contained in the Company's filings with the Securities and
Exchange Commission (SEC) over the past 12 months, copies of which are
available from the SEC or may be obtained upon request from the Company.




For further information:

For further information: Jeff Pritchard, VP-Investor Relations of
Capital  Gold Corporation, +1-212-344-2785, or fax, +1-212-344-4537, 
pritchard@capitalgoldcorp.com; Media, Victor Webb, or Madlene Olson, 
+1-212-684-6601, or fax, +1-212-725-4709, marwebint@cs.com; Investors, Robin 
Cook, Account Manager, CHF Investor Relations, +1-416-868-1079, or fax, 
+1-416-868-6198, robin@chfir.com Web Site: http://www.capitalgoldcorp.com

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CAPITAL GOLD CORPORATION

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