**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
      10-KSB/A**





x ANNUAL
      REPORT
      PURSUANT TO SECTION 13 OR 15 (d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934


**FOR
      THE FISCAL YEAR ENDED JULY 31, 2006**





o TRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15 (d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





**Commission
      File No. 0-13078**





**CAPITAL
      GOLD CORPORATION**


(Name
      of
      Small business issuer in its charter)





**State
                  of
                  Delaware**
              **13-31805030**(State
                  or other jurisdiction of
              (I.R.S.
                  EmployerIncorporation
                  or organization)
              Identification
                  No.)**76
                  Beaver Street, 26thFloor, New York, New York**
              **10005**(Address
                  of principal executive
                  offices)
              (Zip
                  Code)




**Issuer’s
      telephone numbering: (212) 344-2785**





Securities
      registered under Section 12(b) of the Exchange Act: none


Securities
      registered under Section 12(g) of the Exchange Act: Common Stock, par value
      $.0001 per share





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. YES x NO o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulations S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
o
      No x





State
      issuer’s revenues (consisting solely of interest income and immaterial
      miscellaneous other income) for its most recent fiscal year.
      $183,719.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the average between the closing bid
      ($0.31) and asked ($0.31) price of the issuer’s Common Stock as of October 24,
      2006, was $30,569,134 based upon the average between the closing bid and asked
      price ($0.31) multiplied by the 98,610,111 shares of the issuer’s Common Stock
      held by non-affiliates. (In computing this number, issuer has assumed all record
      holders of greater than 5% of the common equity and all directors and officers
      are affiliates of the issuer.)





The
      number of shares outstanding of each of the issuer’s classes of common equity as
      of March 14, 2007 :
      165,629,248 **.**





DOCUMENTS
      INCORPORATED BY REFERENCE: None.





Transitional
      Small Business Disclosure Format: Yes o No x








**Explanatory
      Note**





This
      amendment on Form 10-KSB/A (the “Form 10-KSB/A”) amends our annual report for
      the fiscal year ended July 31, 2006 originally filed with the Securities and
      Exchange Commission (“SEC”) on November 1, 2006 (the “Form 10-KSB”). Primarily,
      we are filing this amendment to clarify disclosure in the description of our
      Mexican concessions in Part I, Item 2. Description of Property.





No
      attempt has been made in this Form 10-KSB/A to modify or update disclosures
      in
      the Form 10-KSB, except with regard to the specific subsections mentioned below.
      This Form 10-KSB/A does not reflect events occurring after the filing of the
      Form 10-KSB or modify or update any related disclosures, except with regard
      to
      the specific subsections mentioned below. Information not affected by the
      amendment is unchanged and reflects the disclosure made at the time of the
      filing of the Form 10-KSB with the SEC. Accordingly, this Form 10-KSB/A should
      be read in conjunction with the Form 10-KSB and our filings made with the SEC
      subsequent to the filing of the Form 10-KSB, including any amendments to those
      filings.





In
      accordance with Rule 12b-15 promulgated under the Securities and Exchange Act
      of
      1934, as amended, the complete texts of Part I, Item 2; and Part III, Item
      13
      are set forth herein, including those portions of the text that have not been
      amended from that set forth in the Form 10-KSB. The only changes to the text
      from the Form 10-KSB are as follows:





Part
      I





Item
      2.  Description
      of Properties.





·
            The
                “Work to Date” and “El Chanate Project” subsections have been
                revised


·
            The
                “Our Current Plans for the El Chanate Project” subsection has been deleted
                and replaced with a new subsection, “Current Status of El Chanate.”





Part
      III





Item
      13.
      Exhibits.





·
            Updated
                certifications from our Chief Executive Officer and Chief Financial
                Officer are attached as Exhibits 31.1, 31.2, 32.1, and
                32.2.




1


**PART
      I**





**Item
      2.** **Description
      of Property**





**El
      Chanate Properties - Sonora, Mexico**





Through
      our wholly-owned subsidiary, Oro de Altar S. de R. L. de C.V. (“Oro”), and our
      affiliate, Minera Santa Rita S. de R.L. de C.V. (“MSR”), we own 100% of the
      following 16 mining concessions, all of which are located in the Municipality
      of
      Altar, State of Sonora Republic of Mexico.





**Concession
                Name**
            
            **Title
                No.**
            
            **Hectares**1
            San
                Jose
            
            200718
            
            96.00002
            Las
                Dos Virgen
            
            214874
            
            132.23503
            Rono
                I
            
            206408
            
            82.19024
            Rono
                3
            
            214224
            
            197.21805
            La
                Cuchilla
            
            211987
            
            143.34816
            Elsa
            
            212004
            
            2,035.39977
            Elisa
            
            214223
            
            78.47178
            Ena
            
            217495
            
            190.00009
            Eva
            
            212395
            
            416.896310
            Mirsa
            
            212082
            
            20.551811
            Olga
            
            212081
            
            60.589012
            Edna
            
            212355
            
            24.043113
            La
                Tira
            
            219624
            
            1.797514
            La
                Tira 1
            
            219623
            
            18.608715
            Los
                Tres
            
            223634
            
            8.00016
            El
                Charro
            
            206,404
            
            40.0000**Total**
            
            3,543.3491





At
      the El
      Chanate Project, our current planned mining activities, will involve mining
      on
      two concessions, San Jose and Las Dos Virgens. We will utilize four other
      concessions for processing mined ores. In the future, provided we have adequate
      funding, we plan to explore some or all of these concessions to determine
      whether or not further activity is warranted.




2







Surface
          Property Ownership
 
 Anglo
          Gold purchased surface property ownership, consisting of 466 Hectares in
          Altar,
          Sonora, on January 27, 1998. The ownership was conveyed to our subsidiary,
          Oro
          de Altar S.A. de C.V., in 2002. MSR, one of our wholly-owned Mexican affiliates,
          has a lease on the property for the purpose of mining the Chanate gold
          deposit.
          The purchase transaction was recorded as public deed 19,591 granted by
          Mr. Jose
          Maria Morera Gonzalez, Notary Public 102 of the Federal District, registered
          at
          the Public Registry of Property of Caborca, Sonora, under number 36026,
          book
          one, volume 169 of the real estate registry section on May 7, 1998.
 
 General
          Information and Location
 
 The
          El
          Chanate Project is located in the State of Sonora, Mexico, 37 kilometers
          northeast of the town of Caborca. It is accessible by paved and all weather
          dirt
          roads typically traveled by pickup trucks and similar vehicles. Driving
          time
          from Caborca is approximately 40 minutes. Access from Caborca to the village
          of
          16 de September is over well maintained National highways. Beyond the 16
          de
          September village, routes to the property are currently over well traveled
          gravel and sandy desert roads suitable for lightweight vehicles. We acquired
          rights for a service road to allow immediate access for mine construction
          activities. This service road access was acquired from the village of 16
          de
          September, and construction of this road is now complete. In addition to
          this
          service road, we had negotiated long term access that does not pass through
          the
          village of 16 de September. However, an issue arose with regard to whether
          the
          land owner from whom we negotiated this right had adequate title to this
          land.
          We continue to rely on the existing access through the village of 16 de
          September.
 
 3
 The
          project is situated on the Sonora desert in a hot and windy climate, generally
          devoid of vegetation with the exception of cactus. The terrain is generally
          flat
          with immense, shallow basins, scattered rock outcropping and low rocky
          hills and
          ridges. The desert floor is covered by shallow, fine sediment, gravel and
          caliche. The main body of the known surface gold covers and irregularly
          shaped
          area of approximately 1,800 feet long by 900 feet wide. Several satellite
          mineral anomalies exist on surfaces which have not been thoroughly explored.
          Assays on chip samples taken from trenches at these locations by us **** indicate
          the presence of gold mineralization.
 
 The
          general El Chanate mine area has been mined for gold since the early
          19 th century.
          A number of old underground workings exist characterized by narrow shafts,
          to a
          depth of several tens of feet and connecting drifts and cross cuts. No
          information exists regarding the amount of gold taken out; however, indications
          are that mining was conducted on a small scale.
 
 Geology
 
 The
          project area is underlain by sedimentary rocks of the Late Jurassic - Early
          Cretaceous Bisbee Group, and the Late Cretaceous Chanate Group, which locally
          are overlain by andesites of the Cretaceous El Charro volcanic complex.
          The
          sedimentary strata are locally intruded by andesitic sills and dikes, a
          microporphyritic latite and by a diorite stock. The sedimentary strata
          are
          comprised of mudstone, siltstone, sandstone, conglomerate, shale and limestone.
          Within the drilled resource area, a predecessor exploration company
          differentiated two units on the basis of their position relative to the
          Chanate
          fault. The upper member is an undifferentiated sequence of sandstone,
          conglomerate and lesser mudstone that lies above the Chanate fault and
          it is
          assigned to the Escalante Formation of the Middle Cretaceous Chanate Group.
          The
          lower member is comprised of mudstone with mixed in sandstone lenses and
          thin
          limestone interbreds; it lies below the Chanate fault and is assigned to
          the
          Arroyo Sasabe Formation of the Lower Cretaceous Bisbee Group. The Arroyo
          Sasabe
          formation overlies the Morita Formation of the Bisbee Group. Both the Escalante
          and Arroyo Sasabe formations are significantly mineralized proximal to
          the
          Chanate fault, while the Morita Formation is barren.
 
 The
          main
          structural feature of the project area is the Chanate fault, a 7 km long
          (minimum) northwest-striking, variably southwest-dipping structure that
          has been
          interpreted to be a thrust fault. The Chanate fault is overturned
          (north-dipping) at surface, and is marked by brittle deformation and shearing
          which has created a pronounced fracture foliation and fissility in the
          host
          rocks. In drill holes the fault is often marked the presence of an andesite
          dike. Reports prepared by a predecessor exploration company describe the
          fault
          as consisting of a series of thrust ramps and flats; however, geologic
          cross
          sections which we have reviewed but did not prepare may negate this
          interpretation.
 
 Alteration/Mineralization
 
 A
          predecessor exploration company has defined a 600 meter long, 300 meter
          wide,
          120 meter thick zone of alteration that is centered about the Chanate fault.
          The
          strata within this zone have been silicified and pyritized to varying degrees.
          In surface outcrop the mineralized zone is distinguished by its bleached
          appearance relative to unmineralized rock. The mineralized zone contains
          only
          single digit ppm (parts per million) levels of gold. Dense swarms of veinlets
          form thick, mineralized lenses, within a larger area of sub-economic but
          anomalous gold concentrations. Drill hole data indicates that the mineralized
          lenses are sub-horizontal to gently southwest-dipping and are grossly parallel
          to the Chanate fault. The fault zone itself is also weakly mineralized,
          although
          strata in the near hanging wall and footwall are appreciably mineralized.
  4
 Work
          to Date
  The
          El
          Chanate property has been the site of small scale mining of high grade
          quartz
          veins (La Cuchilla mine) during the last century. Modern exploration includes
          work by Phelps Dodge in the 1980’s as part of a copper exploration program.
          Kennecott conducted geologic mapping and geochemical sampling in 1991 and
          dropped the property. A Mexican subsidiary of AngloGold explored the property
          intermittently between 1992 and 1997, and has conducted extensive surface
          geologic mapping, geochemical sampling, geophysical studies and drilling,
          including 11,000 meters of trenching, over 14 line-kilometers of induced
          polarization geophysical surveys, 61 line-kilometers of VLF-magnetometer
          geophysical surveys, 87 line-kilometers of enzyme leach geochemical surveys
          and
          34,000 meters of R.C. drilling in 190 holes and 1080 meters of diamond
          drilling
          in 9 holes. That company also commissioned various consultant studies concerning
          petrography, fluid inclusions, air photo interpretation and structural
          analyses,
          and conducted some metallurgical test work.
 
 In
          April
          and May 2002, to confirm previous results obtained by third parties and
          to
          provide specifically located metallurgical test samples, we drilled six
          diamond
          core holes totaling 1,508 feet into the main mineralized zone at El Chanate.
          Management believes that the diamond drill results generally confirmed
          the
          previous results ****** and,
          in
          June 2002 and January 2003, we drilled an additional 45 reverse circulation
          holes totaling 9,410 feet. This reverse circulation drill program confirmed
          previous results and also expanded certain mineralized areas. In May 2004,
          three
          core holes were drilled for a total of 2,155 feet. The total number of
          holes is
          now 256. Of these, 235 are reverse circulation drill holes and 21 are diamond
          drill holes. Detailed check assays were obtained both for core samples
          and for
          reverse drill samples that initially assayed greater than 0.3 grams/tonne.
          Chemex Labs, Vancouver, Canada, preformed both the initial and the check
          assays,
          and the check assays supported the initial assay results.
 
 In
          August
          2002, we retained SRK Consulting (a global engineering company) Denver,
          Colorado, to conduct a scoping engineering study for the El Chanate Project.
          This study was completed in October 2002 and concluded that the El Chanate
          Project deserved additional work and that the property contained important
          gold
          mineralization. The base case for this study assumed a gold price of
          $320.
  Following
          SRK’s positive conclusion, in February 2003, we retained M3 Engineering of
          Tucson, Arizona to begin work on a feasibility study. M3 completed the
          study in
          August 2003. Based on 253 drill holes and more than 22,000 gold assays,
          this
          study (the “2003 Study”) provided details for an open pit gold mine. The 2003
          Study indicated that at a gold price of $325, the initial open pit project
          contains proven and probable reserves of 358,000 ounces of gold contained
          within
          13.5 million metric tonnes of ore with an average grade of 0.827 grams/tonne.
          It
          estimated that the mine could recover approximately 48,000 - 50,000 ounces
          of
          gold per year or 248,854 ounces over a five year mine life.
 
 In
          October 2005, M3 completed an update of the 2003 Study (The “2005 Study”). The
          2005 Study includes the following changes from the 2003 Study:
 
 ·
                an
                    increase in the mine life from five to six
                    years,
 ·
                an
                    increase in the base gold price from $325/oz to
                    $375/oz,
 ·
                use
                    of a mining contractor,
 ·
                revised
                    mining, processing and support
                    costs,
 ·
                  stockpiling
                      of low grade material for possible processing in year six,
                      if justified by
                      gold prices at that time,
 ·
                a
                    reduced size for the waste rock dump and revised design of reclamation
                    waste dump slopes,
 ·
                a
                    revised process of equipment selection
                    and
 ·
                evaluation
                    of the newly acquired water well for processing the
                    ore.
 
 In
          view
          of a significant rise in the gold price, in June 2006, we commissioned
          SRK
          Consulting, Denver, Colorado, to prepare an updated Canadian Securities
          Administration National Instrument 43-101 compliant technical report on
          our El
          Chanate Project. SRK completed this technical report in August 2006 (the
“2006
          Update”). The 2006 Update provided the following updated information from the
          2005 Study:
 
 5
 ·
                an
                    18% increase in the proven mineral reserve
                    tonnage,
 ·
                a
                    59% increase in the probable mineral reserve
                    tonnage
 ·
                an
                    increase in mine life from six to seven
                    years,
 ·
                an
                    increase in the base gold price from $375/oz to $450/oz
                    and
 ·
                Stockpiling
                    of low grade material for possible processing in year seven,
                    if justified
                    by gold prices at that time.
 
 Pursuant
          to the 2005 Study, as updated by the 2006 Update using a $450 per ounce
          gold
          price, our estimated mine life is now seven years as opposed to five years
          and
          the ore reserve is 490,000 ounces of gold present in the ground (up 122,000
          ounces or 33%). Of this, we anticipate recovering approximately 332,000
          ounces
          of gold (up 74,000 ounces or 29%) over a seven year life of the mine. The
          targeted cash cost (which includes mining, processing and on-property general
          and administrative expenses) per the 2005 Study is $259 per ounce (up $29
          per
          ounce). The 2005 Study contains the same mining rate as the 2003 Study
          of 7,500
          metric tonnes per day of ore. It should be noted that, during the preliminary
          engineering phase of the project it was decided to design the crushing
          screening
          and ore stacking system with the capability of processing 10,000 tonnes
          per day
          of ore. This will make allowances for any possible increase in production
          and
          for operational flexibility. It was found that the major components in
          the
          feasibility study would be capable of handling the increase in tonnage.
          Design
          changes were made where necessary to accommodate the increased tonnage. The 2005
          Study takes into consideration a more modern crushing system than the one
          contemplated in the 2003 Study. The crushing system referred to in the
          2005
          Study is a new system, that, we believe will be faster to install and provide
          more efficient processing capabilities than the used equipment referred
          to in
          the 2003 Study. In March 2006, we made a $250,000 down payment to a US
          Supplier
          to acquire a portion of a new crushing system. In October 2006, we paid
          an
          additional $230,000 towards this equipment and we now have purchase orders
          for
          all of the new crushing system. Please see “ *Current
          Status of El Chanate* ”
for
          updated information as of March 2007.
  In
          addition, the 2005 Study assumes a contractor will mine the ore and haul
          it to
          the crushers. In the 2003 Study, we planned to perform these functions.
          As
          discussed below, we have retained a mining contractor.
 
 The
          2005
          Study assumes a mining production rate of 2.6 million tonnes of ore per
          year or
          7,500 tonnes per day. The processing plant will operate 365 days per year.
          The
          processing plan for this open pit heap leach gold project calls for crushing
          the
          ore to 100% minus 3/8 inch. Carbon columns will be used to recover the
          gold.
 
 The
          following Summary is extracted from the 2005 Study, as updated by the 2006
          Update. 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 489,952 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
          331,560 ounces, or approximately 68% of the contained gold. The gold recovery
          rate is expected to average approximately 68% 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%;
          and
          siltstone ore types recoveries may be about 48%.
 
 6
  El
          Chanate Project
 **Production
          Summary**
  Metric
                  
                  U.S.**Materials****Reserves**Proven
                  
                  11.7
                      Million Tonnes
                  
                  @
                      0.811 g/t*
                  
                  12.9
                      Million Tons
                  
                  @
                      0.024 opt*Probable
                  
                  8.2
                      Million Tonnes
                  
                  @
                      0.705 g/t*
                  
                  9.0
                      Million Tons
                  
                  @
                      0.021 opt*Total
                      Reserves
                  
                  19.9
                      Million Tonnes
                  
                  @
                      0.767 g/t*
                  
                  21.9
                      Million Tons
                  
                  @
                      0.022 opt*Other
                      Mineralized Materials
                  
                  0
                      Million Tonnes
                  
                  
                  
                  0
                      Million TonsWaste
                  
                  19.9
                      Million Tonnes
                  
                  
                  
                  21.9
                      Million TonsTotal
                  
                  39.7
                      Million Tonnes
                  
                  
                  
                  43.8
                      Million tonsContained
                      Gold
                  
                  15.24
                      Million grams
                  
                  
                  
                  489,952
                      Oz**Production**Ore
                      Crushed
                  
                  2.6
                      Million Tonnes /Year
                  
                  
                  
                  2.87
                      Million Tons/Year7,500
                        Mt/d*
                  
                  
                  
                  8,267
                        t/dOperating
                      Days/Year
                  
                  365
                      Days per year
                  
                  
                  
                  365
                      Days per yearGold
                        Plant Average Recovery
                  
                  67.7
                        %
                  
                  
                  
                  67.7Average
                        Annual Production
                  
                  1.35
                        Million grams
                  
                  
                  
                  43,414
                        OzTotal
                        Gold Produced
                  
                  10.31
                        Million grams
                  
                  
                  
                  331,560
                        Oz
   
 ·
                “g/t”
                    means grams per metric tonne, “Mt/d means metric tonnes per day and “opt”
                    means ounces per ton.
 ·
                The
                    reserve estimates are based on a recovered gold cutoff grade
                    of 0.20 grams
                    per metric tonne as described below.
  In
          the
          mineral resource block model developed, with blocks 10m (meters) x 10m
          x 5m
          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 4 or more drill holes within a search radius of 40m x 40m
                    x 25m and
                    inside suitable geological zones were classified as Measured
                    (corresponding to Proven);
  ·
                Blocks
                    with 3 or more holes within a search radius of 75m x 75m x 50m
                    and inside
                    suitable geological zones were classified as Indicated (corresponding
                    to
                    Probable);
  ·
                Blocks
                    with 1 or 2 holes within a search radius of 75m x 75m x 50m and
                    inside
                    suitable geological zones were classified as Inferred (and which
                    was
                    classed as waste material in the mining reserves
                    estimate);
  ·
                Blocks
                    outside the above search radii or outside suitable geological
                    zones were
                    not assigned a classification.
  7
 
 The
          proven and probable reserve estimates are based on a recovered gold internal
          cutoff grade of 0.20 grams/tonne. (A constant 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) cutoff grade was used for reserves reporting.
 
 **Cutoff
                  Grade
                  Calculation**
                
                **Internal
                  Cutoff Grade**
                
                **Break
                  Even Cutoff
                  Grade****Basic
                    Parameters**
                  Gold
                    Price
                  Gold
                    Recovery
                  
                  **Operating
                    Costs per Tonne of Ore**
                  Royalty
                    (4%)
                  Smelting
                    & Refining
                  Mining
                    *
                  Processing
                  Heap
                    Leach Pad Development
                  G&A
                  Total
                  
                  **Internal
                    Cutoff Grade**
                  Head
                    Grade Cutoff (67.7% recov.)
                  Recovered
                    Gold Grade Cutoff
                
                US$450/oz
                  67.7%
                  
                  $
                    per Tonne of Ore
                  0.115
                  0.015
                  0.070
                  1.680
                  0.185
                  0.810
                  2.875
                  
                  Grams
                    per Tonne
                  0.29
                  0.20
                
                US$450/oz
                  67.7%
                  
                  $
                    per Tonne of Ore
                  0.164
                  0.021
                  1.250
                  1.680
                  0.185
                  0.810
                  4.110
                  
                  Grams
                    per Tonne
                  0.41
                  0.28
 
 *
          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.
 
 Pursuant
          to the 2005 Study, as updated by the 2006 Update, based on the current
          reserve
          calculations, the mine life is estimated to be approximately seven years, and
          at
          least another year will likely be required to perform required reclamation.
          The
          2005 Study forecasts initial capital costs of $17.9 million, which includes
          $1.7
          million of working capital. Annual production is planned at approximately
          44,000
          to 48,000 ounces per year at an average operating cash cost of $259 per
          ounce.
          We believe that cash costs may decrease as the production rate increases.
          Total
          costs (which include cash costs as well as off-property costs such as property
          taxes, royalties, refining, transportation and insurance costs and exclude
          financing costs) will vary depending upon the price of gold (due to the
          nature
          of underlying payment obligations to the original owner of the property).
          Total
          costs are estimated in the 2005 Study to be $339 per ounce at a gold price
          of
          $417 per ounce (the three year average gold price as of the date of the
          study).
          We will be working on measures to attempt to reduce costs going forward.
          Ore
          reserves and production rates are based on a gold price of $375 per ounce,
          which
          is the Base Case in the 2005 Study. During 2005, the spot price for gold
          on the
          London Exchange has fluctuated between $411.10 and $537.50 per ounce. Between
          January 1, 2006 and October 24, 2006, the spot price for gold on the London
          Exchange has fluctuated between $524.75 and $725.00 per ounce.
 
 Management
          believes that the capital costs to establish a surface, heap leach mining
          operation at El Chanate will be between $17.5 and $18.5 million. For more
          information on the capital costs and our funding activities, please see *“Part
          II, Item 6, Management's Discussion and Analysis of Financial Condition
          and
          Results of Operations; Liquidity and Capital Resources; Plan of
          Operations.”*
 
 8
 Management
          believes the El Chanate Project will benefit substantially from rising
          gold
          prices, which as of October 24, 2006 was around $575 per ounce. Mineralized
          material previously below operating cut-off gold grades could possibly
          become
          economic if future engineering studies support lowering the cutoff grade
          due to
          gold prices substantially above the $450 per ounce used in the 2006 Update
          to
          define the proven and probable reserves mentioned above. We are currently
          looking at processing techniques that may be capable of supporting higher
          production rates that may be justified due to rising gold prices. However,
          the
          new crushing system will likely have to be modified to handle the additional
          tonnage required for expanding our production. The crushing system for
          which we
          received purchase orders, with certain modifications, is expected to have
          a
          capacity beyond the 7,500 metric tons per day that are initially planned.
 
 In
          February 2005, Metcon Research Inc. of Tucson, Arizona completed gold recovery
          studies on existing samples at fine grind sizes of 100 mesh, 150 mesh and
          200
          mesh. These studies were undertaken to determine whether extraction by
          fine
          grinding is economical given the increased price of gold. Generally, fine
          grinding, while more expensive, will achieve higher gold recoveries than
          the
          heap leach method recommended in the feasibility study. Metcon found that
          increasing amounts of gold were recovered at finer grind sizes. However
          in May
          2004, M3, who conducted the feasibility study, reported that at El Chanate,
          heap
          leaching remains the most economical and optimal method of extracting gold
          at
          current prices.
 
 In
          May
          2004, three core holes were drilled at El Chanate to define gold grades,
          to
          obtain metallurgical samples from siltstone hosted ores, and to evaluate
          previous deep drilling results by Anglo Gold in the Los Dos Virgens Zone.
          Two of
          the core holes tested and confirmed the presence of gold in the deep Los
          Dos
          Virgens Zone that lies below the level of the planned open pit. This zone
          was
          previously identified by Anglo Gold’s reverse circulation drilling and, with
          increasing gold prices, we are analyzing with core drilling the conditions
          that
          might allow an enlarged open pit to include ores from the Los Dos Virgens
          zone.
          The third core hole was drilled in the main high grade part of the deposit
          to
          obtain ore samples for metallurgical column testing from siltstone host
          rocks.
 
 The
          latest metallurgical column test studies were completed in February 2005
          at
          Metcon’s laboratory in Tucson Arizona to determine the optimal conditions at El
          Chanate for recovering gold from within siltstone host rocks using heap
          leach
          technology. The siltstone drill core samples were tested at crush sizes
          of 100
          percent -3/8 inch and 100 percent -1/4 inch, and these column tests showed
          recovery rates of 42% and 46% respectively. With rising gold prices, management
          believes the ore reserves may increase beyond the level currently published
          in
          the 2006 Update. Although we are optimistic about the results, there can
          be no
          assurance that improved gold recoveries alone will result in an increase
          in
          reserves.
 
 In
          January 2004, we received permits from the Mexican Department of Environmental
          Affairs and Natural Resources necessary to begin construction of the El
          Chanate
          Project. The permits were extended in June 2005. Pursuant to the extensions,
          once we file a notice that work has commenced, we have one year to prepare
          the
          site and construct the mine and seven years to mine and process ores from
          the
          site. We filed the notice on June 1, 2006. These permits also cover the
          operation of a heap-leach gold recovery system. Please see “ *Current
          Status of El Chanate* ”
for
          updated information as of March 2007.
 
 In
          2005,
          we acquired 15 year rights of way for the current access road, and we acquired
          the right to purchase 81 hectares of land near the main highway. We have
          use of
          the land; however, our actual purchase of the land is conditioned upon
          the Ejido
          (local cooperative) privatizing the land, before the acquisition is finalized.
          We subsequently purchased an extension of our rights-of-way from 15 to
          30 years.
          We have completed an access road on this land that will provide access
          for water
          and power lines. In addition to this road, we acquired a water concession,
          and
          our water well is located within a large regional aquifer. The 2005 feasibility
          study indicates our average life of mine water requirements, for ore processing
          only, will be about 94.6 million gallons per year (11.4 liters per second).
          The
          amount of water we are currently permitted to pump for our operations is
          approximately 71.3 million gallons per year (8.6 liters per second). Our
          currently permitted water rights may not be adequate for all of our total
          project needs over the entire course of our anticipated mining operations.
          We
          are looking into ways to rectify this issue. Please see “ *Current
          Status of El Chanate* ”
for
          updated information as of March 2007.
 
 9
 In
          December 2005, MSR entered into a Mining Contract with a Mexican mining
          contractor, Sinergia Obras Civiles y Mineras, S.A. de C.V. (“Contractor”) The
          Mining Contract becomes effective if and when MSR sends the Contractor
          a formal
          Notice of Award. Pursuant to the Mining Contract, the contractor had the
          right
          to terminate the contract or modify its initial mining rates if it did
          not
          receive the formal Notice by June 1, 2006. MSR would not be obligated to
          proceed
          with the Mining Contract if those modified rates are unacceptable to it.
          In
          August 2006, the Mining Contract was amended to extend MSR’s right to deliver
          the Notice to November 1, 2006 and, provided that the Notice specifies a
          date of commencement of the Work (as defined in the contract) not later
          than
          February 1, 2007, the mining rates set forth in the Mining Contract will
          still apply; subject to adjustment for the rate of inflation between
          September 23, 2005 and the date of commencement of the Work. As
          consideration for these changes, we paid the Contractor $200,000 of the
          requisite advance payment discussed below. On November 1, 2006, MSR delivered
          the Notice of Award specifying January 25, 2007 as the date of commencement
          of
          Work. Please see “ *Current
          Status of El Chanate* ”
for
          updated information as of March 2007.
 
 Pursuant
          to the Mining Contract, the Contractor, using its own equipment, will generally
          perform all of the mining work (other than crushing) at the El Chanate
          Project
          for the life of the mine. Subsequent to delivery of the Notice to Proceed
          and
          prior to the commencement of any work by the Contractor, MSR must pay the
          Contractor a mobilization payment of $70,000, and must also make an advance
          payment of $520,000 to the Contractor (all of which has already been advanced).
          The advance payments are recoverable by MSR out of 100% of subsequent payments
          due to the Contractor under the Mining Contract. Pursuant to the Mining
          Contract, upon termination, the Contractor would be obligated to repay
          any
          portion of the advance payment that had not yet been recouped. The Contractor’s
          mining rates are subject to escalation on an annual basis. This escalation
          is
          tied to the percentage escalation in the Contractor’s costs for various parts
          for its equipment, interest rates and labor. One of the principals of the
          Contractor is one of the former principals of Grupo Minero FG S.A. de C.V.
          (“FG”). FG was our former joint venture partner.
 
 In
          June
          2006, MSR retained the contracting services of a Mexican subsidiary of
          M3
          Engineering & Technology Corporation (“M3M”) to provide EPCM (engineering
          procurement construction management) services. M3M will supervise the
          construction and integration of the various components necessary to commence
          production at the El Chanate Project. The contracted services shall not
          exceed
          $1,200,000 and the contract is based on the EPCM services to be provided
          by M3M.
          As of October 24, 2006, approximately $346,000 has been billed pursuant
          to the
          contract.
 
 In
          March
          2006, we paid $250,000 as a down payment for a portion of a new crushing
          system
          capable of producing 7,500 metric tons per day of ore. The total cost for
          all of
          the crushing equipment (inclusive of site preparation and installation)
          will be
          approximately $4,000,000. In October 2006, we paid an additional $230,000
          towards this equipment and we now have purchase orders for all of the new
          crushing system. As of the date of this report, we have issued purchase
          orders
          for all of the crushing equipment. We also retained Golder Associates,
          - a
          geotechnical engineering firm, for the detailed engineering of the leach
          pads
          and ponds. The engineering was completed in August 2006 and construction
          of the
          leach pads began in September 2006. Please see “ *Current
          Status of El Chanate* ”
for
          updated information as of March 2007.
 
 10
 Current
          Status of El Chanate
 
 We
          have
          made significant progress in the construction and commissioning of our
          mine at
          El Chanate. As of March 13, 2007, engineering and procurement is complete,
          we
          have obtained all permits required to commence mining operations, the majority
          of equipment has been delivered and installed and the infrastructure support
          buildings have been constructed. The current status of the relevant areas
          is as
          follows:
 
 Electrical
          power is supplied from the National grid by CFE (Commission Federal de
          Electricidad) in Caborca at 34.5 kilo volt-amps and is converted to 480
          volts at
          seven transformer stations throughout the site. The transmission lines
          and
          transformers have been installed and commissioned and approved for use
          by CFE.
          An emergency generator has been installed adjacent to the solution ponds
          to
          circulate the leach pad solution in the event of power interruptions. An
          additional substation is being built by the local power company 20 kilometers
          from the mine in the town of Altar. It will have the capability to increase
          power to the mine later this year should additional power be required in
          the
          event of additional consumption requirements for increased production or
          seasonal fluctuations.
 
 Process
          water is supplied from a well owned by MSR, one of our Mexican subsidiaries.
          The
          well’s casing has been inspected and equipped with a new pump and electrical
          hardware. The well is located nine kilometers from the mine and can supply
          water
          in sufficient quantity to support the mine through a new eight inch diameter
          steel pipeline. While there are issues about the adequacy of water supply
          over
          the entire life of the project, based on the anticipated water consumption
          for
          at least the first few years of operation, we believe that we have an allocation
          to meet our requirements. The capability of acquiring additional water
          through
          third party allocation purchase is available, as is the conservation of
          water
          through good operational practice. If we need to obtain additional rights,
          but
          are unable to procure them our planned operations may be adversely affected.
          See
“ *Our
          currently permitted water rights may not be adequate for all of our total
          project needs over the entire course of our anticipated mining operations.
          If we
          need to obtain additional rights, but are unable to procure them our planned
          operations may be adversely affected* ”
in
          “Part I, Item 1, Description of Business; Risk Factors.”
 
 The
          mine
          access road is nine kilometers long and is capable of supporting all anticipated
          traffic. The road connects with a main asphalt road (Route 2) that is maintained
          by the state highways department. There are two arroyos that cross the
          mine
          access road, both of which have concrete crossings to prevent erosion of
          the
          road at these locations, giving year round access to the site. The internal
          access roads have been constructed for the life of the mine.
 
 The
          mine
          is supported by a number of infrastructure buildings all of which have
          been or
          are being constructed. The completed buildings in use are an explosive
          and
          detonator store, a 5,000 sq. ft warehouse, the mine office and the security
          guardhouse and first aid centre. Buildings due for completion by the end
          of
          March 2007 are, the laboratory, lime storage building and a cyanide and
          carbon
          storage building. The refinery building is anticipated to be completed
          by mid
          April 2007.
 
 The
          crushing and screening plant consists of three stage crushing and closed
          circuit
          screening. All of the equipment is new and has a design capacity of 1,000
          tons
          per hour (tph) for the primary crushing circuit and 400 tph for the balance
          of
          the crushing circuit. A 20,000 ton buffer stockpile separates the primary
          crusher from the rest of the circuit allowing the crushing circuits to
          operate
          independently of each other. The crushed ore is stacked on the leach pad
          by a
          series of conveyors and a radial stacker. The equipment is new and has
          been
          commissioned and is currently stacking ore for over liner production and
          leaching. Ore is placed on a leach pad that is (HDPE) plastic lined to
          contain
          the gold bearing solution and transport it via lined launders (plastic
          lined
          earth trenches) to ponds which are double plastic lined. The initial leach
          pad
          will consist of four panels, three of which will be lined at this time
          (the
          ultimate leach pad will consist of ten panels). These four panels will
          allow for
          the stacking of approximately one year of crushed ore. The launder and
          ponds
          have been constructed for the mine life. The first two panels are complete
          and
          the remainder of the launder and pond construction is scheduled for completion
          during March 2007. We anticipate that we will begin to apply cyanide solution
          to
          the ore by the end of April 2007. We anticipate that gold Dore (bars of
          semi-purified gold) production will begin between 45 to 75 days thereafter.
 
 11
 The
          initial supply of ore to the crushing plant and leach pad is being loaded
          and
          delivered by a group of local truckers. Sinergia, the mining contractor,
          is in
          the process of mobilizing the mining fleet to commence mining on March
          25, 2007.
          The Sinergia mining fleet is not new, however it has been refurbished at
          Sinergia’s repair facility and at the Caterpillar dealer in Hermosillo. This
          process has been monitored by us and third party specialists and we believe
          the
          equipment will be suitable for mining when required. Sinergia is constructing
          staff accommodation within an existing Ejido village adjacent to the mine
          site.
          On site power, water, and fuel supply has been made available for Sinergia’s use
          as prescribed in the mining contract.
 
 The
          gold
          in the cyanide/gold solution (pregnant solution) will be recovered using
          activated carbon held in tanks. The activated carbon will be transferred
          on a
          daily basis to a processing plant (ADR Plant) that, with the use of chemicals,
          will extract the gold from the pregnant solution. The gold from the solution
          will be deposited by an electrowinning (electrolysis) process and then
          dried,
          mixed with fluxes (substances that reduce the melting point of the material
          and
          remove impurities in the metal) and smelted in a furnace to produce gold
          Dore.
          The solution that has been stripped of gold will gravitate to the barren
          solution pond. Cyanide will be added to this and the solution will be pumped
          to
          freshly stacked ore. The ADR Plant is not new. It has been refurbished;
          all of
          the pumps, valves, piping, instruments and electrical components have been
          replaced. The pumps and piping associated with the solution ponds are also
          new.
          We anticipate that the ADR Plant will be operational and ready for use
          by mid
          April 2007.
 
 We
          have
          filled all key positions in finance, human resources, operations and mine
          support (other than a General Manager), and the majority of the remainder
          of the
          staff is also in place. Our Chief Operating Officer is acting as our General
          Manager until a replacement can be found. We are actively searching for
          a
          replacement and we do not believe that it will be a problem finding a suitable
          candidate. We forecast a total staffing complement of between 70 and 80
          people.
          The mine has three towns in close proximity where the staff live. With
          this
          local infrastructure, the staff will be bussed to site, eliminating the
          need for
          an on site camp. Certain duties such as security and staff transport will
          be
          contracted. In the town of Caborca we own a house and rent an office. While
          we
          have constructed and are using an on-site office, we will retain an “in town”
office for the project life.
 
 We
          have
          entered into a supply agreement for cyanide and have ordered consumable
          supplies
          such as explosives and carbon. Wear parts and critical spare parts have
          also
          been delivered to the mine. A fully equipped laboratory has been constructed
          at
          the mine with the capability of monitoring the mine operation and conducting
          metallurgical test work. We anticipate that the laboratory will be fully
          functional during April 2007.
 
 During
          the construction and commissioning process, we have been assisted by a
          number of
          suppliers and consultants to ensure that the transition into full production
          becomes a seamless event. Given the location of the mine, there are many
          local
          services available to support the operation. Where we feel it is prudent
          to
          retain critical items such as pond and water well pumps, we have done so
          and we
          have constructed storage facilities to store in excess of three months
          supply of
          reagents should we foresee supply shortages looming.
 
 To
          support the mine we have purchased a number of vehicles and support equipment
          that were used during construction. The equipment consists of a 35 ton
          crane, a
          water truck, an ambulance, a D4 dozer, a front end loader and a forklift/tool
          handler. We also have purchased a number of additional equipment such as
          lighting plants, welders and small tools.
 
 12
 Our
          acquisition and ownership of the El Chanate Project
 
 In
          June
          2001, we purchased 100% of the issued and outstanding stock of Minera Chanate,
          S.A. de C.V. from AngloGold North America Inc. and AngloGold (Jerritt Canyon)
          Corp. Minera Chanate’s assets at the time of the closing of the purchase
          consisted of 106 exploitation and exploration concessions in the States
          of
          Sonora, Chihuahua and Guerrero, Mexico. By June of 2002, after property
          reviews
          and to minimize tax payments, the 106 had been reduced to 12 concessions.
          To
          cover certain non-critical gaps between concessions, three new concessions
          were
          located, and the number of concessions is now 16. These concessions are
          contiguous, totaling approximately 3,544 hectares (8,756 acres or 13.7
          square
          miles). We sometimes refer to these concessions as the El Chanate concessions.
          Although there are 16 concessions, we only plan to mine two of these concessions
          at the present time. We sometimes refer to the planned operations on these
          two
          concessions as the El Chanate Project We also own outright 466 hectares
          (1,151
          acres or 1.8 square miles) of surface rights at El Chanate and no third
          party
          ownership or leases exist on this fee land or the El Chanate concessions.
          In the
          future, assuming adequate funding is available, we plan on conducting
          exploration activities on some of the other concessions.
 
 Pursuant
          to the terms of the agreement with Anglo Gold, in December 2001, we made
          a
          $50,000 payment to AngloGold. AngloGold will be entitled to receive the
          remainder of the purchase price by way of an ongoing percentage of net
          smelter
          returns of between 2% and 4% plus a 10% net profits interest (until the
          total
          net profits interest payment received by AngloGold equals $1,000,000).
          AngloGold's right to a payment of a percentage of net smelter returns and
          the
          net profits interest will terminate at such point as they aggregate $18,018,355.
          In accordance with the agreement, the foregoing payments are not to be
          construed
          as royalty payments. Should the Mexican government or other jurisdiction
          determine that such payments are royalties, we could be subjected to and
          would
          be responsible for any withholding taxes assessed on such payments.
 
 Under
          the
          terms of the agreement, we have granted AngloGold the right to designate
          one of
          its wholly-owned Mexican subsidiaries to receive a one-time option to purchase
          51% of Minera Chanate (or such entity that owns the El Chanate concessions
          at
          the time of option exercise). That option is exercisable over a 180 day
          period
          commencing at such time as we notify AngloGold that we have made a good
          faith
          determination that we have gold-bearing ore deposits on any one of the
          identified groups of El Chanate concessions, when aggregated with any ore
          that
          we have mined, produced and sold from such concessions, of in excess of
          2,000,000 troy ounces of contained gold. The exercise price would equal
          twice
          our project costs on the properties during the period commencing on December
          15,
          2000 and ending on the date of such notice. Based on current information
          available to us, we do not believe a deposit of the size that would trigger
          these back-in rights is likely to be identified at El Chanate.
 
 In
          February 2002, MSR, one of our wholly-owned Mexican affiliates, now the
          leasee
          of the El Chanate concessions, as discussed below, entered into a joint
          venture
          agreement with Grupo Minero FG S.A. de C.V. to explore, evaluate and develop
          the
          El Chanate concessions. Grupo Minero FG S.A. de C.V., referred to as FG,
          is a
          private Mexican company that owns and operates the La Colorada open-pit gold
          mine outside of Hermosillo in Sonora, Mexico.
 
 Effective
          March 31, 2004, the joint venture agreement with FG was terminated. In
          consideration of FG’s contributions to the venture of $457,455, we issued to FG
          2,000,000 restricted shares of our Common Stock valued at $800,000 and
          MSR
          issued to FG a participation certificate entitling FG to receive five percent
          of
          the MSR’s annual dividends, when declared. The participation certificate also
          gives FG the right to participate, but not to vote, in the meetings of
          MSR’s
          Board of Managers, Technical Committee and Partners. In September 2006,
          we
          repurchased the participation certificate from FG for $500,000 with FG
          retaining
          a 1% net profits interest in MSR, payable only after a total $20 million
          in net
          profits has been generated from operations at El Chanate. MSR also received
          a
          right of first refusal to carry out the works and render construction services
          required to effectuate the El Chanate Project. This right of first refusal
          is
          not applicable where a funding source for the project determines that others
          should render such works or services.
 
 13
 FG
          has
          assigned or otherwise transferred to MSR all permits, licenses, consents
          and
          authorizations (collectively, “authorizations”) for which FG had obtained in its
          name in connection with the development of the El Chanate Project to the
          extent
          that the authorizations are assignable. To the extent that the authorizations
          are not assignable or otherwise transferable, FG has given its consent
          for the
          authorizations to be cancelled so that they can be re-issued or re-granted
          in
          MSR’s name. The foregoing has been completed.
 
 During
          March 2002, prior to the sale of Minera Chanate and pursuant to the FG
          joint
          venture agreement, Minera Chanate, in a series of transactions, sold all
          of its
          surface land and mining claims to Oro de Altar S. de R. L. de C.V. ("Oro"),
          another of our wholly-owned subsidiaries. Oro, in turn, leased the foregoing
          land and mining claims to Minera Santa Rita.
  14
 
 **PART
          III**
 
 **Item
          13.**  **Exhibits.**
 
 Exhibits
  3.1
                
                Certificate
                    of Incorporation of Company.(1)
 3.2
                
                Amendments
                    to Certificate of Incorporation of
                    Company.(1)(5)
 3.3
                
                Certificate
                    of Merger (Delaware) (which amends our Certificate of
                    Incorporation)(16)
 3.4
                
                Amended
                    and Restated By-Laws of Company(17)
 
 4.1
                Specimen certificate representing our Common
                  Stock.(9)  4.2
                Form
                    of Warrant for Common Stock of the Company issued in February
                    2005 private
                    placement.(8)
 4.3
                Form
                    of Warrant for Common Stock of the Company issued to Standard
                    Bank.(10)
 4.4
                Form
                    of Warrant for Common Stock of the Company issued in February
                    and March
                    2006 private placement.(14)
 
 4.5
                Rights
                    Agreement, dated as of August 15, 2006, between the Company and
                    American
                    Stock Transfer & Trust Company. The Right Agreement includes the Form
                    of Certificate of Designation of the Series B Common Stock and
                    the Form of
                    Right Certificate. (17)  10.1
                Mining Claims (1)  10.2
                Stock Purchase Option Agreement from AngloGold
                  (2)  10.3
                Letter of Intent with International Northair
                  Mines Ltd.
                  (2)
 10.4
                March
                    30, 2002 Minera Chanate Stock Purchase and Sale and Security
                    Agreement
                    (Sale by us and Holding of all of the stock of Minera Chanate)
                    (In
                    Spanish).(3)
 10.5
                English
                    summary of March 30, 2002 Minera Chanate Stock Purchase and Sale
                    and
                    Security Agreement.(3)  10.6
                Agreement between Santa Rita and Grupo Minero
                  FG.(4)  10.7
                Amendment to Agreement between Santa Rita and
                  Grupo
                  Minero FG.(6)  10.8
                Termination Agreement between Santa Rita and
                  Grupo Minero
                  FG.(7)  10.9
                English summary of El Charro agreement.
                  (11)  10.10
                Plan and agreement of merger (reincorporation).
                  (12)  10.11
                Contract between MSR and Sinergia Obras Civiles
                  y
                  Mineras, S.A. de C.V.(13)
 10.12
                Amendment
                    to Contract between MSR and Sinergia Obras Civiles y Mineras,
                    S.A. de
                    C.V.
 10.13
                September
                    2006 Chipman Amended Engagement Agreement.
 10.14
                Employment
                    Agreement with John Brownlie. (18)
 10.15
                June
                    1, 2006 EPCM agreement between MSR and a Mexican subsidiary of
                    M3
                    Engineering & Technology Corporation
                    (18)
 10.16
                Credit
                    Agreement dated August 15, 2006 among MSR and Oro, as the borrowers,
                    the
                    Company, as the guarantor, and Standard Bank PLC, as the lender
                    and the
                    offshore account holder. (17)
 10.17
                Employment
                    Agreement with Gifford A. Dieterle.
 10.18
                Employment
                    Agreement with Roger A. Newell.
 10.19
                Employment
                    Agreement with Jack V. Everett.
 10.20
                Employment
                    Agreement with Jeffrey W. Pritchard.  21
                Subsidiaries of the Registrant.
                  (9)
 
 15
 
 31.1
                Certification
                    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from
                    the
                    Company's Chief Executive Officer.
 
 31.2
                Certification
                    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from
                    the
                    Company's Chief Financial Officer.
 
 32.1
                Certification
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from
                    the
                    Company's Chief Executive Officer.
 
 32.2
                Certification
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from
                    the
                    Company's Chief Financial Officer.
  
 (1)
                Previously
                    filed as an exhibit to the Company's Registration Statement on
                    Form S-18
                    (SEC File No. 2-86160-NY) filed on or about November 10, 1983,
                    and
                    incorporated herein by this
                    reference.
 
 (2)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended January 31, 2001 filed with the Commission
                    on or about
                    March 16, 2001, and incorporated herein by this
                    reference.
 
 (3)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended April 30, 2002 filed with the Commission on
                    or about
                    June 20, 2002, and incorporated herein by this
                    reference.
 
 (4)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended January 31, 2002 filed with the Commission
                    on or about
                    March 25, 2002, and incorporated herein by this
                    reference.
 
 (5)
                Previously
                    filed as an exhibit to the Company's Current Report on Form 8-K
                    filed with
                    the Commission on or about April 11, 2003, and incorporated herein
                    by this
                    reference.
 
 (6)
                Previously
                    filed as an exhibit to the Company's Current Report on Form 8-K
                    filed with
                    the Commission on or about January 22, 2004, and incorporated
                    herein by
                    this reference.
 
 (7)
                Previously
                    filed as an exhibit to the Company's Current Report on Form 8-K
                    filed with
                    the Commission on or about April 12, 2004, and incorporated herein
                    by this
                    reference.
 
 (8)
                Previously
                    filed as an exhibit to the Company's Current Report on Form 8-K
                    filed with
                    the Commission on or about February 10, 2005, and incorporated
                    herein by
                    this reference.
 
 (9)
                Previously
                    filed as an exhibit to the Company's Registration Statement on
                    Form SB-2
                    (SEC file no. 333-123216) filed with the Commission on or about
                    March 9,
                    2005, and incorporated herein by this
                    reference.
 
 (10)
                Previously
                    filed as an exhibit to Amendment No. 1 to the Company's Registration
                    Statement on Form SB-2 (SEC file no. 333-123216) filed with the
                    Commission
                    on or about June 27, 2005, and incorporated herein by this
                    reference.
 
 16
 (11)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended April 30, 2005 filed with the Commission on
                    or about
                    June 20, 2005, and incorporated herein by this
                    reference.
 
 (12)
                Previously
                    filed as Appendix B to the Company's Definitive 14A Proxy Statement
                    filed
                    with the Commission on or about October 7, 2005, and incorporated
                    herein
                    by this reference.
 
 (13)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended October 31, 2005 filed with the Commission
                    on or about
                    December 15, 2005, and incorporated herein by this
                    reference.
 
 (14)
                Previously
                    filed as an exhibit to the Company's Current Report on Form 8-K
                    filed with
                    the Commission on or about February 16, 2006, and incorporated
                    herein by
                    this reference.
 
 (15)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended January 31, 2006 filed with the Commission
                    on or about
                    March 22, 2006, and incorporated herein by this
                    reference.
 
 (16)
                Previously
                    filed as an exhibit to the Company's Registration Statement on
                    Form SB-2
                    (SEC file no. 333-129939) filed with the Commission on or about
                    November
                    23, 2005, and incorporated herein by this
                    reference.
 
 (17)
                Previously
                    filed as an exhibit to the Company's Current Report on Form 8-K
                    filed with
                    the Commission on or about August 16, 2006, and incorporated
                    herein by
                    this reference.
 
 (18)
                Previously
                    filed as an exhibit to the Company's Quarterly Report on Form
                    10-QSB for
                    the quarter ended April 30, 2006 filed with the Commission on
                    or about
                    June 19, 2006, and incorporated herein by this
                    reference.
 
 Statements
          contained in this Form 10-KSB as to the contents of any agreement or other
          document referred to are not complete, and where such agreement or other
          document is an exhibit to this Report or is included in any forms indicated
          above, each such statement is deemed to be qualified and amplified in all
          respects by such provisions.
 
 17
  **SIGNATURES**
 
 Pursuant
          to the requirements of Section 13 or 15(d) of the Securities Exchange Act
          of 1934, the registrant has duly caused this amendment to its Form 10-KSB
          annual
          report to be signed on its behalf by the undersigned, thereunto duly
          authorized.
  CAPITAL
                  GOLD
                  CORPORATIONDated:
                  March 16, 2007
                By:
                /s/Gifford
                  A. DieterleGifford
                  A. Dieterle,
                  President
  Pursuant
          to the requirements of the Securities Exchange Act of 1934, this amendment
          to
          Form 10-KSB annual report has been signed below by the following persons
          on
          behalf of the registrant and in the capacities and on the dates
          indicated.
 SIGNATURES
                  
                  TITLE
                  
                  DATE/s/
Gifford
                    A. Dieterle
                  
                  President,
                  
                  March
                      16, 2007Gifford
                      A. Dieterle
                  
                  Treasurer,and
                      Chairmanof
                      the Board of Directors/s/
Christopher
                    M. Chipman
                  
                  Principal
                      FinancialChristopher
                      M. Chipman
                  
                  and
                      Accounting Officer
                  
                  March
                      16, 2007/s/
John
                    Brownlie
                  
                  Director
                  
                  March
                      17, 2007John
                      Brownlie/s/
Jack
                    V. Everett
                  
                  Director
                  
                  March
                      15, 2007Jack
                      V. EverettDirector
                  
                  March
                      __, 2007Robert
                      N. Roningen/s/
Roger
                    A. Newell
                  
                  Director
                  
                  March
                      15, 2007Roger
                      A. Newell/s/
Jeffrey
                    W. Pritchard
                  
                  Director
                  
                  March
                      15, 2007Jeffrey
                      W. Pritchard/s/
Ian
                    A. Shaw
                  
                  Director
                  
                  March
                      17, 2007Ian
                      A. Shaw/s/
John
                    Postle
                  
                  Director
                  
                  March
                      16, 2007John
                      PostleDirector
                  
                  March
                      __, 2007Mark
                    T. Nesbitt
  18