CAPITAL GOLD BUYS OUT REMAINING OUNCES UNDER THE GOLD HEDGE AGREEMENT
60,000 Ounce Annual Production Completely Unhedged
New York, February 24, 2009 - Capital Gold (TSX:CGC; OTC/BB:CGLD) announced today that the Company has settled with Standard Bank, Plc., the remaining 58,233 ounces of gold under the original Gold Price Protection arrangements entered into in March 2006. The purpose of these arrangements at the time was to protect the Company in the event the gold price dropped below $500 per ounce. Total cost to unwind these arrangements is approximately US$1.9 million, saving the Company over $130,000. This now enables Capital Gold to move forward as a completely unhedged producer.
Capital Gold Chairman Gifford Dieterle said, "This arrangement was required as part of our original loan agreement with Standard Bank. Considering that we've been in production for over 18 months and the gold price has nearly doubled since the time of the financing, we felt the best use of funds, at this point, was to unwind the hedge and eliminate any misconceptions regarding it."
About Capital Gold
Capital Gold Corporation (CGC; CGLD) 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 65,000 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.
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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. |