The last time junior gold producer Capital Gold (CGC-T, CGLD-O) was in the news was in late March, when its board of directors decided not to go through with a proposed merger with Gammon Gold (GAM-T, GRS-N).
Now, Capital Gold is back in the spotlight with strong results from its 100%-owned El Chanate open-pit gold mine in Mexico’s Sonora state, which has some of the lowest operating costs in the industry.
In the three months ended April 30, the company’s total cost per oz. gold sold came in at US$305, down from US$337 per oz. in the year-earlier period.
Capital Gold also reported revenues climbed 42% year-on-year to US$12.39 million in the three-month period.
So far this year, the company is off to a pretty good start. In May, it updated its reserve count. Currently, El Chanate has proven and probable reserves of 43.1 million tonnes grading 0.659 gram gold per tonne for total contained gold of 913,000 oz.
Excluding the reserve and at a cutoff grade of 0.2 gram gold per tonne, El Chanate has measured and indicated resources of 21.3 million tonnes grading 0.643 gram gold for total contained gold of 440,000 oz., and an inferred resource of 6 million tonnes at 0.748 gram gold for 144,000 oz. gold.
Since the mine went into production in August 2007, it has produced more than 75,000 oz. gold.
At presstime, Capital Gold traded at 75¢ per share; over the last year, it has traded in a range of 31-96¢. The company has 193.4 million shares outstanding.
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