New York, August 2, 2007 Capital Gold (TSX:CGC; OTC/BB:CGLD) said today that they had begun gold production at their El Chanate Mine in Sonora, Mexico.  In so doing, they have become Mexico’s and North America’s newest gold producer. The first shipment was estimated at 575 ounces of gold and shipped to Met-Mex Penoles on July 31 for final refining.

A delighted Gifford Dieterle, Capital Gold’s Chairman and CEO said that the beginning of production at El Chanate is the culmination of years of dedicated work by everyone at Capital Gold. “We completed the bank financing and began major construction of El Chanate in August of 2006. In less than one year we are producing gold. This is a monumental achievement and a credit to John Brownlie, our COO, and the team he has assembled”.

Norberto Roque Díaz de León, Coordinator of Mining at Mexico’s Secretaría de Economía,, said he was especially pleased that Capital Gold had begun gold production in Sonora to become Mexico's newest producer “Capital Gold has today joined the ranks of a special group of well-managed mining companies who have found success with us in Mexico. We wish them many years of profitable production and growth in Sonora”.

Mr. Dieterle said the Company is moving forward in a number of areas. Next on the horizon for Capital Gold’s evolution will be the results of the recently concluded drill campaign. Independent Mining consultants of Tucson, AZ will be preparing the new proven and probable ore reserve, an updated mine plan and 43-101 report for the Canadian authorities. It is anticipated this will all be completed by the end of August. “Now that we have achieved our goal of gold production at El Chanate, we are not content to rest on our laurels. We are now looking at other mining properties with a view toward acquisition. From this point forward we shall be focused on growing Capital Gold into a mid-tier gold producer,” he said.

Capital Gold is currently trading at .50 Canadian.