Filed
Pursuant to Rule 424(b)(3) Registration No.s 333-138858,
333-133565,
333−129939 and 333-123216
PROSPECTUS
SUPPLEMENT
Number
4
to
Prospectus
dated December 5, 2006
of
CAPITAL
GOLD CORPORATION
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY
IS A
CRIMINAL OFFENSE.
This
prospectus supplement no. 4 supplements the information provided in our
prospectus dated December 5, 2006 and supplements no. 1 through 3 thereto.
This
prospectus supplement should be read in conjunction with that Prospectus
and
supplements no. 1 through 3, which are to be delivered with this prospectus
supplement.
This
Prospectus Supplement includes our Current Report on Form 8-K filed with
the
Securities and Exchange Commission on September 5, 2007.
The
date
of this Prospectus Supplement is September 6, 2007.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported)
August
29, 2007
(Exact
name of registrant as specified in its charter)
Delaware
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|
0-13078
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13-3180530
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(state
or other jurisdiction
of
incorporation)
|
|
(Commission
File Number)
|
|
(I.R.S.
Employer
Identification
No.)
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76
Beaver Street, New York, NY
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10005
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (212)
344-2785
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Section
5 - Corporate Governance and Management
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On
August
29, 2007, based on the recommendation of the Compensation Committee of our
Board
of Directors after review of an Executive Compensation Market Analysis and
Report by an independent human
resource professional services firm, we increased the salaries of our executive
officers to be commensurate with industry standards. The new salaries are as
follows: Gifford A. Dieterle, President,
Treasurer and Chairman of the Board, $250,000; John Brownlie, Chief Operating
Officer, $225,000; Christopher Chipman, Chief Financial Officer, $175,000
(consulting fee); Jeffrey W. Pritchard, Vice President - Investor Relations
and
Secretary, $195,000; Roger A. Newell, Vice President - Development, $135,000;
and J. Scott Hazlitt, Vice President - Mine Development, $135,000. The salary
increase for Mr. Brownlie and the consulting fee increase for Mr. Chipman are
retroactive to May 1, 2007 and the salary increase for Mr. Pritchard is
retroactive to August 1, 2007. We also increased directors’ compensation to our
independent directors and to Robert Roningen by $1,000 per month.
Section
8 - Other Events
Item
8.01 Other
Events.
Gold
production at our El Chanate Project began in early August 2007 and we started
to receive revenues from operations in mid August 2007. During our first month
we produced 3,175 ounces of gold. The gold dore is being refined for us in
Mexico by Met-Mex Penoles.
In
May
2007, we completed an expanded 72-hole reverse circulation drilling campaign
to
identify additional proven and probable gold reserves at the El Chanate Project.
The 72 holes totaled approximately 8,300 meters, and were positioned to fill
in
gaps in the ore body and test the outer limits of the currently known ore zones.
We turned the assay data over to Independent Mining Consultants, Inc. (“IMC”) of
Tucson, AZ to update our ore reserve and our mine plan. On August 30, 2007,
IMC
delivered to us an updated resource block model and an updated mine plan and
mine production schedule (the “2007 Report”).
According
to the 2007 Report, our proven and probable reserve tonnage has increased by
approximately 97 percent from 19.9 million to 39.5 million metric tonnes with
a
gold grade of 0.66 grams per tonne (43.5 million US short tons at 0.019 ounces
per ton). The open pit stripping ratio is 0.6:1 (0.6 tonnes of waste to one
tonne of ore). The updated pit design for the revised plan in the 2007 Report
is
based on a plant recovery of gold that varies by rock types, but is expected
to
average 66.8%. A gold price of US$550 (SEC three year average as of July 31,
2007) per ounce was used to re-estimate the reserves compared with a gold price
of $450 per ounce used in the previous estimate.
Gold
production at El Chanate is currently near the feasibility study rate of 4,000
ounces per month. We plan to slowly start to ramp up daily tonnage levels from
7,500 tonnes per day (“tpd”) to 10,000 tpd. This should boost our gold
production toward 5,000 ounces per month (60,000 ounces per year). With this
reserve increase, we will now be analyzing what steps are necessary to
effectively increase production rates and improve gold recoveries by conducting
further metallurgical test work at our laboratory facilities at the mine.
Initially,
we anticipate that the increased plant throughput will not require any capital
since an additional ore crushing and stacking capacity was factored into the
original design.
The
following Summary is extracted from the 2007 Report. Please note that the
reserves as stated are an estimate of what can be economically and legally
recovered from the mine and, as such, incorporate
losses
for dilution and mining recovery. The
832,280 ounces of contained gold represents ounces of gold contained in ore
in
the ground, and therefore does not reflect losses in the recovery process.
Total
gold produced is estimated to be 555,960 ounces, or approximately 66.8% of
the
contained gold. The gold recovery rate is expected to average approximately
66.8% for the entire ore body. Individual portions of the ore body may
experience varying recovery rates ranging from about 73% to 48%. Oxidized and
sandstone ore types may have recoveries of about 73%; fault zone ore type
recoveries may be about 64%; siltstone ore types recoveries may be about 48%
and
latite intrusive ore type recoveries may be about 50%.
El
Chanate Project
Production
Summary
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Metric
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U.S.
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Materials
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Reserves
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Proven
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26.7
Million Tonnes @ 0.68 g/t*
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29.4
Million Tons @ 0.0198 opt*
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Probable
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12.8
Million Tonnes
@
0.61
g/t*
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14.1
Million Tons
@
0.0179
opt*
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Total
Reserves
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39.5
Million Tonnes @ 0.66 g/t*
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43.5
Million Tons @ 0.0192 opt*
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Waste
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24.1
Million Tonnes
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26.6
Million Tons
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Total
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63.6
Million Tonnes
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70.1
Million tons
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Contained
Gold
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25.89
Million grams
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832,280
Oz
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Production
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Ore
Crushed
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2.6
Million Tonnes /Year
7,500
Mt/d*
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2.87
Million Tons/Year
8,267
t/d
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Operating
Days/Year
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365
Days per year
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365
Days per year
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Gold
Plant Average Recovery
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66.8
%
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66.8
%
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Average
Annual Production
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1.35
Million grams
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43,414
Oz
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Total
Gold Produced
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17.29
Million grams
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555,960
Oz
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·
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“g/t”
means grams per metric tonne, “opt” means ounces per ton, “Mt/d” means
metric tonnes per day and “t/d” means tons per
day.
|
·
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The
reserve estimates are based on a recovered gold cutoff grade of 0.17
to
0.21 grams per metric tonne, depending on the operating year, and
as
described below.
|
In
the
mineral resource block model developed, with blocks 6m (meters) x 6m x 6m high,
Measured and Indicated resources (corresponding to Proven and Probable reserves
respectively when within the pit design) were classified in accordance with
the
following scheme:
|
·
|
Blocks
with 2 or more drill holes within a search radius of 80m x 70m x
40m and
with a relative kriging (a geostatistical calculation technique)
standard
deviation less than or equal to 0.45 were classified as Measured
(corresponding to Proven);
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|
·
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Blocks
with 1 hole within the search radius of 80m x 70m x 40m and with
a
relative kriging standard deviation of 0.60 or less, blocks with
2 holes
and a kriging standard deviation of 0.70 or less, blocks with 3 holes
and
a kriging standard deviation of 0.80 or less, blocks with 4 holes
and a
relative kriging standard deviation of 0.90 or less and all blocks
with 5
or more holes within the search radius were classified as Indicated
(corresponding to Probable), unless they met the above criterion
for
Proven;
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|
·
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Blocks
with a grade estimate that did not meet the above criteria were classified
as Inferred (and which was classed as waste material in the mining
reserves estimate);
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|
·
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Blocks
outside the above search radii or outside suitable geological zones
were
not assigned a gold grade or a resource
classification.
|
The
proven and probable reserve estimates are based on a recovered gold cutoff
grade
of 0.17 to 0.21 grams/tonne, depending on the operating year. The variation
is
due to balancing the mine and plant production capacities on a year by year
basis for the plan. (A recovered gold cutoff grade was used for reserves
calculation as the head gold grade cutoff varies with the different ore types
due to their variable gold recoveries.) The internal (in-pit) and break even
cutoff grade calculations are as follows:
Cutoff
Grade Calculation
Basic
Parameters
Gold
Price
Shipping
and Refining
Gold
Recovery
Royalty
Operating
Costs per Tonne of Ore
Mining
*
Processing/Leach
Pad
G&A
Total
Internal
Cutoff Grade
Head
Grade Cutoff (66.8% recov.)
Recovered
Gold Grade Cutoff
|
Internal
Cutoff Grade
US$550/oz
US$
4.14/oz
66.8%
4%
of NSR
$
per Tonne of Ore
0.070
1.980
0.800
2.850
Grams
per Tonne
0.25
0.17
|
Break
Even Cutoff Grade
US$550/oz
US$
4.14/oz
66.8%
4%
of NSR
$
per Tonne of Ore
1.360
1.980
0.800
4.140
Grams
per Tonne
0.37
0.25
|
* |
The
calculation of an internal cutoff grade does not include the basic
mining
costs (which are considered to be sunk costs for material within
the
designed pit). The $0.07 per tonne cost included is the incremental
(added) cost of hauling ore over hauling waste, and which is included
in
the calculation.
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Section
9 - Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits. The following exhibit is filed herewith:
Exhibit
No. |
Exhibit
Title |
99.1 |
Press
Release, dated September 4, 2007 issued by
us.*
|
* |
This
information shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, and shall not be deemed incorporated
by
reference in any filing with the Securities and Exchange Commission
under
the Securities Exchange Act of 1934 or the Securities Act of 1933,
whether
made before or after the date hereof and irrespective of any general
incorporation language in any
filings.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
CAPITAL
GOLD CORPORATION
September
5, 2007
By:
/s/
Gifford A. Dieterle
Gifford
A. Dieterle, President