Business Combination Agreement

 

NEW YORK - Capital Gold Corporation and Nayarit Gold Inc. jointly announced that they have entered into an agreement with respect to a proposed business combination in an all-share transaction subject to the completion of satisfactory due diligence, receipt of Nayarit and Capital Gold shareholder approval, receipt by Nayarit of a fairness opinion, regulatory approvals and the satisfaction of certain other conditions. The transaction is expected to close in May 2010.

Capital Gold is a gold production and exploration company with operations in Mexico. Nayarit is a Canadian mineral exploration company with a NI 43-101 resource estimate and a preliminary economic analysis on its flagship property in Nayarit, Mexico.

Nayarit has recently through SRK Consulting (US) Inc. of Lakewood CO completed a preliminary economic assessment on its Orion property located in the state of Nayarit Mexico and Capital Gold at its El Chanate mine through recent enhancements increased its gold production. Capital Gold is also working to add additional mineral resources through its exploration efforts at its Saric properties located a short distance from its El Chanate mine in Sonora, Mexico.