Global Hunter Securities Initiates Coverage of Capital Gold Corp. (CGLD) with a Buy

October 19, 2009 9:35 AM EDT

Global Hunter Securities initiates coverage of Capital Gold Corp. (OTCBB: CGLD) with a Buy rating.

Global analyst says, "The company has recently had an internal coup that has slimmed down its board and resulted in the industry veteran John Brownlie rising to a position of leadership. The board has also had an infusion of new talent with financial sector experience...The perpetual “For Sale” sign has been taken down and the company is on the acquisition trail...Its goal has a goal of acquiring a 20-30,000 opa Au property that will help it break the “glass-ceiling” of 100K opa in production...Capital Gold is well-cashed up with USD$6.4mn as at the end of July 2009...We are expecting earnings to rise by around 60% in FY10 (year ending July 31st)...The company was producing gold at the rate of 50,000 ozs per annum in FY09 and should be at a run-rate of 70,000 ozs by the end of 2010. Its cash costs in the low $300s per oz are amongst the lowest in the industry globally...Bloated management is being cut back...The possibility of a super-pit at El Chanate is being investigated...The company exited its last hedging agreements in February...The Saric property offers the possibility of a second string to Capital Gold’s bow...We feel the transition is 80% complete but not entirely ready. Some swapping of positions might be called for with Brownlie becoming the CEO...Finding an acquisition target is not as easy as it was with the gold price rocking at the moment."

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