Capital Gold Commences Deep Drilling Campaign



    Sets New Benchmark in Monthly Gold Production

    NEW YORK, Sept. 8 /CNW/ -- Capital Gold (TSX: CGC; OTC Bulletin Board:  
CGLD) announced today that the Company has initiated a deep drilling campaign
at its El Chanate mine in Sonora, Mexico.  A total of 1,500 meters is
scheduled to be drilled over the next few weeks.
    The core drill campaign consists of five 300 meter deep holes at an
exploration target on the southern extremity of the El Chanate main pit called
Dos Virgens. "The drilling at Dos Virgens will target a known mineralized
zone, at depth," stated John Brownlie, Capital Gold's Chief Operating Officer.
"The Company's strong cash position has enabled us to advance exploration
activity at the mine with the intention of increasing proven and probable gold
reserves."
    Once this data has been compiled and analyzed, it will be added to
results from a previous drilling program which consisted of 26 reverse
circulation holes.  Capital Gold will then combine all of this data to produce
a revised proven and probable reserve estimate later this year.
    Brownlie noted that steady progress has been made by the Capital Gold
team.  The Company produced approximately 4,750 ounces of gold and over 6,000
ounces of silver in August.  These production totals are a significant
increase over the previous months that averaged between 3,000-4,000 ounces.
"We set a new record for monthly gold production in August," said Brownlie.
"This production amounts to almost 5,000 ounces in gold and gold equivalents
for the month. We are on an upward trend that we expect to maintain and
improve upon throughout the year."  Our production cost continues to run under
$250 per ounce, still well below industry average. Brownlie added, "We are
dedicated toward growing the Company by extending present reserves at El
Chanate while looking for new gold projects in Mexico."
    
    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 proven and probable reserve is
now 832,000 ounces of gold. The Company has produced 40,000 ounces of gold in
its first year of operation. 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, 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 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, Executive Vice President,
212-344-2785, fax, 212-344-4537, or pritchard@capitalgoldcorp.com, or Kelly
Cody, Director, Corporate Communications, 212-344-2785, or fax, 212-344-4537,
or kelly@capitalgoldcorp.com, both of Capital Gold Corporation; media
inquiries, Victor Webb or Madlene Olson, 212-684-6601, or fax, 212-725-4709,
or marwebint@cs.com, both of Marston Webb International Web Site:
http://www.capitalgoldcorp.com

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CAPITAL GOLD CORPORATION

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