Negotiations with Timmins Gold

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NEW YORK, Feb. 1, 2011 /CNW/ -- Capital Gold Corporation (TSX: CGC; NYSE Amex: CGC) announced today that its Board of Directors (the "Board") has advised Timmins Gold Corp. ("Timmins"), of its determination to terminate its consideration of the proposal submitted by Timmins as it has determined that the Timmins proposal does not constitute a superior proposal as that term is defined in the agreement and plan of merger with Gammon Gold ("Gammon"). This determination is based upon Capital Gold's review of Timmins' due diligence materials. Additional disclosure with respect to the Board's deliberations will be set forth in a further amendment to the Company's Preliminary Proxy contained within Gammon's Registration Statement on Form F-4.

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About Capital Gold

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Capital Gold Corporation (CGC) is a gold production and exploration company. Through its Mexican subsidiaries and affiliates, it owns 100% of the "El Chanate" gold mine located near the town of Caborca in Sonora, Mexico. On August 2, 2010, Capital Gold acquired Nayarit Gold Inc. Capital Gold is focused on optimizing the El Chanate operations and advancing the Del Norte deposit in the Orion District in the state of Nayarit, Mexico. Capital Gold also owns and leases mineral concessions near the town of Saric, also located in Sonora, that are undergoing exploration for gold and silver mineralization. Additional information about Capital Gold and the El Chanate Gold Mine is available on the Company's website, http://www.capitalgoldcorp.com/">www.capitalgoldcorp.com.

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Important Additional Information Regarding the Acquisition will be filed with the SEC.