Working in a marketplace with long lead times and large capital expenditures requires patience and fortitude. Capital seems to flow like water with very little return coming from it. If, however, an investor is willing to stick out the long lead times, or happens to time the development cycle correctly, large veins of profit are likely.
Capital Gold Corp., a gold production and exploration company, works to extract gold from its El Chanate gold property in northern Mexico. Positive recent news has found that a former partner company has decided not to exercise its one-time “back-in option” for this mining property – allowing Capital Gold to move forward with future plans.
The company appears to have a fairly stable operation running with its El Chanate gold property. An average monthly output of 4,200 oz. has enabled the company to assess its position and make plans. Organic growth is the key element of future company plans, with new US-manufactured equipment on site. The company, however, is also interested in growth through acquisition of producing or exploratory sites/companies in northern Mexico. In general terms, the company is feeling solid about its estimated in-ground reserves of approximately 832,000 ounces of gold and is ready to expand its reach into the mid-tier of gold suppliers.
The price of gold is the obvious factor when considering profitability and expansion for the company. It has been selling with a price range of $834 per/oz. and views this as a solid level for its future needs. As the commodity market continues its high-flying activities, it is difficult to tell what this price will do as the US dollar starts to make noises about coming off its historic lows. Capital Gold, however, is in a solid position at the moment and ready to move toward establishing itself as a solid mid-tier supplier regardless of price direction.
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