Capital Gold Corporation Provides Production and Operational Outlook for Fiscal 2011
NEW YORK, Aug. 23 /PRNewswire-FirstCall/ — Capital Gold Corporation (NYSE Amex: CGC; TSX: CGC) (“The Company”) today provided a production and operational outlook for fiscal 2011 (August 1, 2010 to July 31, 2011) at the Company’s mining projects in Mexico, including the El Chanate open pit mine in Sonora, the Saric exploration property that is also in Sonora and the Orion project in the State of Nayarit.
In fiscal 2011, Capital Gold expects to produce 65,000 to 70,000 ounces of gold. In order to meet the Company’s production target, approximately 5.4 million tonnes of ore is anticipated to be processed for the year with an average grade of 0.70 grams per tonne gold and a strip ratio of 2:1.
Management expects to work towards its production and operational targets by the following key upgrades and/or additions planned at the three properties:
- Since July 2010, the Company commenced the use of belt agglomeration with cement which is added to the crushed ore at El Chanate to improve the flow of leaching solution. Since commencement of the agglomeration, the Company has seen a significant increase in both daily production and ounces loaded to carbon.
- Kappes Cassiday & Associates has been advising management with respect to heap leaching optimization, which has resulted in recommendations to increase the barren solution flow to the leach pad, increase the pregnant solution flow to the recovery plant, and redirect the low grade solution to the leach pads. These operational changes combined with the agglomeration with cement and barren solution have resulted in immediate improvements in leaching time and a reduction in inventory levels.
- Management has ordered two agglomeration drums which are expected to arrive by January 2011. The current belt agglomeration is a temporary measure until the drums are delivered. The use of agglomeration drums will allow for better mixing of cement and lime with the crushed ore, producing a consistent quality control of the product.
Updates to Crushing Circuit
- The Company has increased the speed of the tertiary crushers by 20% which has resulted in a finer crush size of the ore which has resulted in a faster recovery time.
- Maintenance and scheduling improvements to the crushing circuit, including changes to the design of the cone crush liners, have maximized the availability of the crushing plant which has resulted in improved crushing and stacking rates.
Infill and Exploration Drilling
- Since April 2010, the Company has been conducting in-fill drilling at the El Chanate mine. To date, 75 holes — a total of 8,560 meters — have been drilled with further exploration planned during the remainder of 2010. The goal of the in-fill drilling is to replace depleted reserves and improve the forecasted accuracy of the mine plan.
- The Company has drilled along the north pit wall of the El Chanate mine to test for additional mineralization dipping at steep inclinations. Management has also been drilling on the perimeter of the open pit.
- The data from both the infill and exploration drilling will be used to update the resource estimate which is anticipated to be released in fiscal 2011.
- The Company will continue to accelerate the Orion project and evaluate production improvements at El Chanate, with an objective of combined production of 120,000 gold equivalent ounces by 2013.
- Construction of an additional heap leach pad has commenced. The capacity of the additional heap leach pad will accommodate approximately two years of production and will be available for stacking in November 2010. When combined with the original and west pads, the capacity is expected to be 20 million tonnes. Management plans to expand the heap leach pad on the south, east and west side to accommodate the current ore reserve. Construction on the pad is expected to be completed in May 2011.
- The purchase of additional water rights earlier this year has enabled the Company to drill another water supply well. The new well is nearing completion, and will allow a further increase in solution flows to the leach pad.
- The Company is evaluating an increase in crushing capacity to support an increase in gold production going forward. The current crushing capacity is 15,000 tonnes per day. Management is considering a capacity increase to 18,000 tonnes per day.
- The Company is currently evaluating a transition from a contractor mine fleet to an owner operator mine fleet which could potentially lead to a reduction in operating costs over the life of the El Chanate mine.
Advance the Orion Project to a Pre-feasibility Study
- Geotechnical drilling of five holes is in the planning stages for the Orion project.
- The Company is in the process of completing a detailed topographic mapping of the project to define drill targets with a potential of increasing resources.
- The Company expects to commence a 2,000 metre drill campaign on drill ready targets slated for the beginning of 2011.
- The Company expects to conduct metallurgical testing to develop and confirm processing options outlined by SRK Consulting Inc. in their 2010 Preliminary Economic Assessment.
- The project is expected to progress to a pre-feasibility stage by the second quarter of 2011.
- The Company expects to commence a bidding process to obtain quotes on advancing the underground access ramp.
Continue Exploration at the Saric exploration property
- A geophysical survey is scheduled to commence at the Saric exploration property in late 2010.
- The geophysical survey will assist management in determining where the Company’s focus should be for the next drill campaign. Earlier this year, the Company drilled 13 core holes at Saric totaling 1,100 meters.
Capital Gold’s President, Colin Sutherland, stated: “Our commitment is to consistently improve upon our operational efficiencies at the El Chanate mine. The Company is focused on optimizing operations at El Chanate in order to further increase gold production, and at the same time, look to fully exploit our development potential at both Orion and Saric.”
About Capital Gold
Capital Gold Corporation (CGC) is a gold production and exploration company. Through its Mexican subsidiaries and affiliates, it owns 100% of the “El Chanate” gold mine located near the town of Caborca in Sonora, Mexico. On August 2, 2010, Capital Gold acquired Nayarit Gold Inc. and merged it into its wholly owned subsidiary. Capital Gold is focused on optimizing the El Chanate operations and advancing the Del Norte deposit in the Orion District in the state of Nayarit, Mexico. Capital Gold also owns and leases mineral concessions near the town of Saric, also in Sonora, that are undergoing exploration for gold and silver mineralization. Additional information about Capital Gold and the El Chanate Gold Mine is available on the Company’s website, www.capitalgoldcorp.com.
Cautionary Note Regarding Forward Looking Statements
Statements in this press release and the statements of representatives and partners of Capital Gold Corporation (the “Company”) related thereto, other than statements of historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to the Company’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” or similar expressions. Investors are cautioned that forward-looking statements are inherently uncertain and subject to material risks. 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 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, strip ratio, tonnes mined, crushed or milled; delay or failure to receive board, regulatory or government approvals; the availability of adequate water supplies; mining or processing issues, and fluctuations in gold price and costs. Many of these factors are beyond the Company’s control. 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), copies of which are available from the SEC or may be obtained upon request from the Company. The Company undertakes no obligation to publically update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
SOURCE Capital Gold Corporation