Capital Gold Corporation (CGLD)

My new gold pick is CGLD.OB which also trades on the Toronto exchange under ticker CGC! Now many of you are familiar with CGLD since we originally profiled it to everyone in our gold report at only $0.31, up 58% for our initial investors at the high of $0.489. Since we have signed so many new members recently I decided to send a special alert to everyone to stress how much I love CGLD and why I believe it can become our biggest gold winner ever!

CGLD is currently only trading for $0.42. CGLD has about 193 mm shares outstanding and 183 mm shares in the float.

CGLD is one of the fastest growing and profitable Gold miners in the world! CGLD just released that it had its best monthly production of gold to date surpassing its previous month by 13%! That's huge! CGLD produced 11,413 ounces of gold in the 1Q of 2009 and a record 5,375 ounces just last month! CGLD anticipates producing 70,000 ounces of gold in 2009 and has proven and probable Gold reserves up to 832,000 ounces of gold! (http://www.capitalgoldcorp.com/company-facts.asp)

CGLD's revenues for the first Q of 2009 were up 41% over a year ago to $9,175,000 from the 11,413 ounces of gold sold at an average of $805 per ounce and net income before taxes was up 64% to 2,863,000 compared to $1,747,000 a year ago!

Also, CGLD's production costs are well below the gold industry average. Just last quarter, CGLD's production costs were only $255 per ounce! Other gold companies like Newmont Mining- NEM had production costs of almost double that at $480 per ounce! CGLD keeps its costs low and profits high for several reasons. First, CGLD mines in a relatively populated area of Sonora, Mexico, with a good skilled workforce entirely Mexican. There is no need to furnish housing or meals for the crew as they can go home at the end of the day. In addition, they have a good local mining contractor and diesel costs are lower in Mexico. CGLD has all the characteristics we look for to become a huge success for our club!

This is a NO BRAINER! We have repeated to you over and over again how important fundamentals are when evaluating a company. If CGLD anticipates producing 70,000 ounces of gold in 2009 and we believe gold is going way above $1,500 an ounce, think about the explosive revenue growth CGLD is about to receive! Let's assume a conservative average price for gold in 2009 is $1,500 per ounce. (I'm sure you all know I believe Gold will go much higher.)

At $1,500 per ounce of gold x (times) 70,000 ounces produced by CGLD = (equals) $105 Million in potential revenue!

Now CGLD had net income after taxes last quarter of $1,936,000 on revenues of $9,175,000. This is a net margin of about 21%.

So if CGLD generates $105 Million in revenue and maintains a net margin of 21% it can potentially generate over $22 Million in annualized net income for 2009!

This is unbelievable!

Most gold companies right now like Gold Corp Inc- GG are trading for P/E's way above 20. If we use a conservative P/E of just 20 for CGLD with net income of $22 Million that would equal a market cap of $440 Million! With 193 Million shares outstanding for the company that would give CGLD a PPS of $2.28, up 443% from the current PPS of only $0.42! Think about the potential return on investment!

I can't believe CGLD is still trading at these levels! In my opinion, we will see CGLD above a dollar in no time!

Furthermore, the company stated that the construction for a new ADR plant is near completion and is expected to be operational this quarter!

Also, the company stated that it expects to produce the same amount in silver as gold! This means even more revenue added to the bottom line! I believe silver prices will follow in Gold's footsteps and also take off this year! Just recently, CGLD placed an order for a secondary crusher which could also increase their production rate even higher than 70,000 ounces! Remember, CGLD's proven and probable Gold reserves are now up to 832,000 ounces!

Last, CGLD is currently looking into a number of potential acquisitions and purchase targets including late stage development projects as well as already producing low cost mines in Mexico.

The chart looks great and the last candle gives me the impression that this stock is ready to make its next leg up. Take a look-

Here is some Technical Analysis-

In my opinion, CGLD is an incredible opportunity that I believe is tremendously undervalued at the current level and has huge upside potential. CGLD will profit and significantly capitalize on the upcoming gold rally . Don't waste any time and do your due diligence on CGLD as soon as possible. We could start to see a breakout in the stock as soon as tomorrow!

Here's a list of some of our other recent gold winners!

DROOY - Alert Price- $3.31 High $6.50, +96%

GOLD- Alert Price- $15.60 High $56.28 +260%

GRZ- Alert Price- $0.39 High $1.25, +220%

AGT- Alert Price- $0.12 High $0.31, +158%

AZK- Alert Price- $1.73 High $3.45, +99%

GORO- Alert Price- $2.24 High $3.88, +73%

JAG- Alert Price- $2.26 High $5.34, +138%

GLW- Alert Price- $8.04 High $11.50, +43%

GG- Alert Price- $24.22 High $33.20, +37%

SA- Alert Price- $8.90 High $15.72, +77%

NEM- Alert Price- $28.79 High $41.79, +45%

If you haven't yet please read my gold report that was released in November- http://www.wallstreetgrand.com/commentary.html

MORE UPDATES TO COME...