Capital Gold Announces That AngloGold Ashanti Elects Not to Exercise Back-In Agreement

    NEW YORK, July 8 /CNW/ - Capital Gold (TSX: CGC; OTC Bulletin Board:  
CGLD) announced today that AngloGold Ashanti (NYSE:   AU) has informed Capital
Gold that it would not be exercising its one time back-in right to acquire a
51% interest in the El Chanate project, pursuant to the terms of the Stock
Purchase Option Agreement dated effective December 15, 2000, between AngloGold
and Capital Gold.
    Capital Gold's Chairman Gifford Dieterle said: "This is the best possible
outcome for our shareholders and a very important event. We can now move
forward immediately on our strategy to develop Capital Gold into a mid-tier
gold producer." Dieterle added, "We are looking to grow the company through
acquisition, the development of our own exploration properties and the
potential to further expand El Chanate."
    John Brownlie, Capital Gold's Chief Operating Officer stated: "We have
been looking at a number of potential acquisition and purchase targets in
northern Mexico since the beginning of the year. These include both late-stage
development projects as well as producing mines. Our plan is to effectively
use the investment and synergies we have already established in Mexico to
develop another low-cost producing gold mine." Brownlie continued: "Our
relationship with Anglo remains on very good terms, and they wish us continued
success with El Chanate. Now that the decision is made, we are keeping all of
our options open."

    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. Further information about Capital Gold and the El
Chanate Gold Mine is available on the Company's website,
    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, VP-Investor Relations,
+1-212-344-2785, or Fax, +1-212-344-4537,, or
Kelly Cody, Director, Corporate Communications, +1-212-344-2785, or Fax,
+1-212-344-4537,, both of Capital Gold Corporation;
or Media Inquiries: Victor Webb or Madlene Olson, +1-212-684-6601, or Fax,
+1-212-725-4709,, both of Marston Webb International, for
Capital Gold Web Site:

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