Capital Gold Announces Increased Reserves at the El Chanate Mine, Sonora, Mexico



    NEW YORK, May 7 /CNW/ -- Capital Gold Corporation (TSX:CGC; OTC Bulletin
Board: CGLD) is pleased to announce an updated reserve statement disclosing
increased reserves for its El Chanate open pit gold mine in Sonora, Mexico. 
The Company began producing gold at El Chanate in August 2007 and, since that
time, has produced over 75,000 ounces of gold, at one of the lowest operating
costs in the industry.

    During 2007 and 2008, Capital Gold conducted exploration activities in
the El Chanate pit area including, a ground magnetic survey and two drilling
campaigns totaling 4,912 meters of reverse circulation drilling and 2,891
meters of core drilling, to evaluate the ongoing potential for expanding its
reserves.  The knowledge obtained about the geology of the deposit during
mining, combined with the assays from the samples from this exploration
drilling, were used to expand the information in the Company's mine database. 
Capital Gold has used this data to re-estimate El Chanate's mineral reserves.
The table below shows the updated Proven and Probable reserves at El Chanate
as of December 31, 2008:


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

    
    Proven Mineral
     Reserve                 20,896,000         0.772           519,000
    

    
    Probable Mineral
     Reserve                 14,926,000         0.702           337,000
    

    
    Low Grade Stockpile
     (Probable)               7,318,000         0.246            58,000
    

    
    Proven and Probable
     Mineral Reserve         43,140,000         0.659           913,000


    
    Capital Gold Chairman Gifford Dieterle said, "As a result of our
exploration activities, low operating costs and higher gold prices, we have
been able to replace all of the reserve depletion since mining began in 2007.
We will continue to search for additional ore within our concession holdings
and the Company remains optimistic on the gold price."

    The new mineral reserves are 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, Arizona, an independent consulting
firm. 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 64.2%.  A gold
price of US$750 (SEC three year average as of March 20, 2009) per ounce was
used to estimate the reserves.  The stated proven and probable mineral
reserves have been prepared in accordance with CIM Definitions.  A technical
report supporting this estimate is being finalized that complies with Canada's
National Instrument 43-101 Standards of Disclosure for Mineral Projects and
will be filed on SEDAR shortly. These reserves are equivalent to proven and
probable reserves as defined by the United States Securities and Exchange
Commission (SEC) Industry Guide 7.

    As the table below shows, the total amount of measured and indicated
mineral resources contained at El Chanate, net of the proven and probable
mineral reserves, is now approximately 21.3 million tonnes, grading 0.643
grams/tonne.  Inferred mineral resources are an additional 6.0 million tonnes
at 0.748 grams/tonne gold.  This estimate was prepared by IMC in accordance
with CIM Definitions based on a gold price of $850 per ounce and a 0.2 g/t
gold cutoff grade.


    
              El Chanate Mineral Resource - Exclusive of Mineral Reserve
                              0.2 g/t Gold Cutoff Grade
    

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

    
    Measured Mineral
     Resource                 5,105,000       0.676             111,000
    

    
    Indicated Mineral
     Resource                16,194,000       0.632             329,000
    

    
    Measured and Indicated
     Resource                21,299,000       0.643             440,000
    

    
    Inferred Mineral
     Resource                 5,978,000       0.748             144,000



    
    Cautionary Note to U.S. Investors - All mineral resources have been
estimated and disclosed in accordance with the definition standards on mineral
resources and mineral reserves of the Canadian Institute of Mining, Metallurgy
and Petroleum referred to in Canadian Securities Administrators National
Instrument 43-101 (NI 43-101), which requires disclosure of resources.
Disclosure of "contained ounces" is only permitted if the quantity and grade
of contained metal or mineral is included in the disclosure. U.S. reporting
requirements for disclosure of mineral properties are governed by the United
States Securities and Exchange Commission "SEC" Industry Guide 7. Canadian and
Guide 7 standards are substantially different.

    The SEC permits mining companies, in their filings with the SEC, to
disclose only those mineral deposits defined as probable or proven reserves
that a company can economically and legally extract or produce. We use certain
terms in this news release, such as "measured," "indicated," and "inferred
resources," that the SEC guidelines strictly prohibit from including in
filings with the United States SEC.  Investors are cautioned not to assume
that any part or all of mineral resources will ever be confirmed or converted
into Guide 7 compliant "reserves." Disclosure of "contained ounces" in a
resource is permitted disclosure under Canadian regulations; however, the SEC
normally only permits issuers to report mineralization that does not
constitute Guide 7 compliant "reserves" by SEC standards as in-place tonnage
and grade without reference to unit measures.

    Investors are urged to consider closely the disclosure in our annual
report on Form 10-K, including the risk factors contained therein. You can
review and obtain copies of this filing from the SEC's website at
http://www.sec.gov/edgar.shtml.
    

    Qualified Person
    
    The mineral resource and reserve estimates contained in this news release
have been prepared by Michael G. Hester, FAusIMM, Vice President of IMC, a
qualified person within the meaning of National Instrument 43-101.
    

    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. The Company has produced over
75,000 ounces of gold since inception. 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, estimated future gold production, the impact of
any hedging arrangements, including the termination of such arrangements;
potential mine life and future growth of the company. Factors that could cause
actual results to differ materially include timing of and, unexpected events
during expansion; 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.


    
    Contact:
    Jeff Pritchard, Executive Vice President
    Capital Gold Corporation
    Tel: (212) 344-2785
    Fax: (212) 344-4537
    Email: pritchard@capitalgoldcorp.com
    

    
    Kelly Cody, Director Corporate Communications
    Capital Gold Corporation
    Tel: (212) 344-2785
    Fax: (212) 344-4537
    Email: kelly@capitalgoldcorp.com
    

    
    Media Inquiries:
    Victor Webb/Madlene Olson
    Marston Webb International
    Tel: (212) 684-6601
    Fax: (212) 725-4709
    Email: marwebint@cs.com






    




For further information:

For further information: Jeff Pritchard, Executive Vice President,
+1-212-344-2785, Fax: +1-212-344-4537, pritchard@capitalgoldcorp.com; or Kelly
Cody, Director Corporate Communications, +1-212-344-2785, Fax:
+1-212-344-4537, kelly@capitalgoldcorp.com, both of Capital Gold Corporation;
or for Media Inquiries: Victor Webb or Madlene Olson, both of Marston Webb
International, +1-212-684-6601, Fax: +1-212-725-4709, marwebint@cs.com  Web
Site: http://www.capitalgoldcorp.com

Organization Profile

CAPITAL GOLD CORPORATION

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890