Significant New Mining Concessions Leased

NEW YORK, NY - Capital Gold reported that the Company has produced approximately 9,500 ounces of gold in the third fiscal quarter (ended Apr. 30, 2008) at its El Chanate mine in Sonora, Mexico. Estimates for the cost of production (including mining, crushing, processing and site G & A) are approximately $246 per ounce, which are in line with the first two quarters of production. Gross proceeds from the quarter are just over $8.8 million, with an average sale price of $930 per ounce.
Updating the production expansion progress at El Chanate, Capital Gold's Chief Operating Officer, John Brownlie, said that everything is moving on schedule. "The leach pad expansion is completed, giving us five years of ore stacking capacity. We have also increased the overall pumping ability of the system and have installed additional carbon columns that will triple the current handling capacity," Brownlie said. "The last item needed is an additional carbon regeneration kiln, which is being sourced. Once this is installed, we should be able to reach an annualized rate of 70,000 ounces per year in gold production." All of these upgrades have been financed through operating cash flow.
In other developments, Capital Gold recently leased 12 mining concessions totaling 1,790 hectares located northwest of Saric, Sonora. Also, a claim has been filed for approximately 2200 additional hectares adjacent to this property. These concessions and this claim are about a sixty mile drive northeast of the El Chanate project. Mineralization is evident throughout, and is hosted by shear zones and quartz veins in granite intrusive, the company said. A short drill campaign, along with some geochemical work, is currently underway.
AngloGold Ashanti completed an initial due diligence visit to the El Chanate mine in mid-April. A decision on whether or not they exercise their one-time back-in right needs to be made by July 28th, 2008.