Gammon 2010 Exploration Adds Proven and Probable Reserves and Measured and Indicated Resources

TORONTO, Feb. 28 /CNW/ - Gammon Gold Inc. ("Gammon") (TSX: GAM) and (NYSE: GRS) today reported its updated Reserves and Resources, as at December 31st, 2010 which include the addition of 0.5 million gold equivalent ounces(1) to Proven and Probable Reserves and an increase of 0.2 million gold equivalent ounces(2) to Measured and Indicated Resources.

All figures reported are in U.S. dollars unless otherwise indicated.

Highlights:

    <<
    -   Addition to company-wide Proven and Probable Reserves of 459 thousand
        gold equivalent ounces(1), an increase of 18% before mining
        depletion;
    -   Addition to company-wide Measured and Indicated Resources of 238
        thousand gold equivalent ounces(2), an increase of 47% (calculated at
        metal prices below current spot prices);
    -   Addition to Proven and Probable Reserves at Ocampo of 398 thousand
        gold equivalent ounces(1), an increase of 20% before mining
        depletion, including:
        -  280 thousand gold equivalent ounces(1) at the Ocampo underground,
           an increase of 45%
        -  118 thousand gold equivalent ounces(1) at Ocampo open pit
           operations, an increase of 9%
    -   Addition to Proven and Probable Reserves at El Cubo of 61 thousand
        gold equivalent ounces(1), an increase of 10% before mining
        depletion;
    -   Proven and Probable Reserves of 2.7 million gold equivalent ounces(1)
        company-wide including:
        -  1.6 million gold ounces, an increase of 11%
        -  71.0 million silver ounces, an increase of 7%
    -   Measured & Indicated Resources of 741 thousand gold equivalent
        ounces(2) company-wide including:
        -  0.5 million gold ounces, an increase of 36%
        -  16.0 million silver ounces, an increase of 68%
    >>

Rene Marion, President and CEO, commented: "In this, the first year in which meaningful exploration has been conducted on Gammon's properties, we have been able to significantly extend the life of the underground and open pit ore bodies at Ocampo and add ounces at El Cubo, despite the limited exploration work conducted there in 2010. Our reserve ounces were added at a favourable finding cost of only $49 per gold equivalent ounce(1) and represent highly profitable ounces given their immediate proximity to existing mine development and infrastructure." Rene Marion continued, "We are also very pleased that measured and indicated resources have increased to 741 thousand gold equivalent ounces(2) and it's worth noting that at today's metal prices, many of these ounces could be classified as reserves. The 2010 exploration program has not only extended the North East underground operation by two kilometers to the south, connecting to the Picacho open pit, but has also identified ten (10) new underground veins and one new open pit. The 2011 success driven exploration program at Ocampo has been expanded from 2010 and will not only focus on continued resource conversion, but also on 13 new underground veins located in four distinct regions and on six (6) new open pit targets."

    <<
    -------------------
    (1) Gold equivalent Reserves use a silver to gold ratio of 61.75:1
    (2) Gold equivalent Resources use a silver to gold ratio of 55.00:1

    Proven and Probable Mineral Reserves
    -------------------------------------------------------------------------
    >>

Gammon Consolidated

Using a silver to gold equivalency ratio of 61.75:1 Gammon's total Proven and Probable mineral reserves at year-end 2010 increased by 459 thousand gold equivalent ounces, or 18% prior to depletion. After accounting for mining depletion of 226 thousand gold equivalent ounces, Proven and Probable reserves stand at 2.7 million gold equivalent ounces, versus 2.5 million gold equivalent ounces at year end 2009, or an increase of 9%.

Ocampo Underground

Using a silver to gold equivalency ratio of 61.75:1, 2010 year-end Proven and Probable reserves at the Ocampo underground increased by 280 thousand gold equivalent ounces, or 45% prior to mining depletion. After accounting for depletion of 82 thousand gold equivalent ounces, Proven and Probable reserves stand at 810 thousand gold equivalent ounces representing an increase of 32%. During the year, Ocampo added six new veins to reserves at the northeast underground, and increased reserves in 14 of the 20 existing veins there. In addition, the six veins that comprise the Santa Eduviges complex were added to reserves and Santa Eduviges was brought into production at year-end.

Ocampo Open Pits

Using a silver to gold equivalency ratio of 61.75:1, 2010 year-end Proven and Probable reserves at the Ocampo open pits increased by 118 thousand gold equivalent ounces, or 9% prior to mining depletion. After accounting for mining depletion of 121 thousand gold equivalent ounces, Proven and Probable reserves stand at 1.3 million gold equivalent ounces. Additional surface drilling in 2010 has seen the extension of the pits to the east at Picacho and to the south in Refugio/PDG, and as well the inclusion in reserves for the first time of a new satellite pit, Los Molinas, that is located 300 metres from the Ocampo mill facility.

El Cubo Underground

During the curtailment of production in the second half of 2010 the El Cubo geology staff was able to focus on the re-interpretation of past sampling programs and on the incorporation of the successful five month drilling program up until the labour disruption action. Using a silver to gold equivalency ratio of 61.75:1, 2010 year-end Proven and Probable reserves at the El Cubo mine increased by 61 thousand gold equivalent ounces, or 10% prior to mining depletion. After accounting for limited mining depletion, Proven and Probable reserves stand at 620 thousand gold equivalent ounces representing a 6% increase. Included in the resource additions at El Cubo are the delineation of two entirely new veins discovered during the 2009/2010 drilling programs, for which a plan and budget is in place for immediate development upon the mine's restart.

    <<
    Gammon Consolidated Measured & Indicated Mineral Resources and Inferred
    Resources
    -------------------------------------------------------------------------
    >>

Gammon's total Measured and Indicated mineral resources at year-end 2010 increased by 238 thousand gold equivalent ounces to 741 thousand gold equivalent ounces, or 47%, versus 503 thousand gold equivalent ounces at a silver to gold equivalency ratio of 55:1.

Gammon's total Inferred mineral resources at year-end 2010 decreased by 174 thousand ounces to 4.6 million gold equivalent ounces, or 4% versus 4.8 million gold equivalent ounces at a silver to gold equivalency ratio of 55:1.

    <<
    Reserve and Resource Estimates
    -------------------------------------------------------------------------
    >>

Mineral Reserves and Mineral Resources are stated as of December 31, 2010. Mineral Reserves have been calculated assuming the three year trailing average metal prices and used a gold price of $1,025 per ounce, and a silver price of $16.60 per ounce for a silver to gold equivalency ratio of 61.75:1. Mineral Resources have been calculated using a gold price of $1,250 per ounce, and a silver price of $22.75 per ounce, for a silver to gold equivalency ratio of 55:1.

    <<
    2011 Exploration Program
    -------------------------------------------------------------------------
    >>

Gammon has committed to an extensive exploration program in 2011 designed to follow up on the success of both the 2010 drilling program and the resulting reserve and resource additions. The following is a breakdown of the currently planned and approved drilling programs across the company:

    <<
    -------------------------------------------------------------------------
                                      Expenditures        Drill  Development
    Project                            ($ millions)          (m)          (m)
    -------------------------------------------------------------------------
    Ocampo                                   27-29      159,000        7,900
    -------------------------------------------------------------------------
    El Cubo                                    2-3       12,000            -
    -------------------------------------------------------------------------
    Guadalupe y Calvo                          4-5       15,000        1,700
    -------------------------------------------------------------------------
    Grassroots                                 7-8       25,000            -
    -------------------------------------------------------------------------
    Total                                    40-45      211,000        9,600
    -------------------------------------------------------------------------
    >>

About Gammon Gold

Gammon Gold Inc. is a mid-tier gold and silver producer with properties in Mexico. Gammon's flagship Ocampo Property is located in Chihuahua State. Gammon also owns the El Cubo mine in Guanajuato State and the Guadalupe y Calvo development property in Chihuahua State. In 2010 Gammon completed option purchase agreements to acquire the Los Jarros and Venus Projects located directly north and east of the Ocampo mine, the Mezquite Project in Zacatecas State, and has signed a binding Letter of Intent to joint venture into the La Bandera gold project in Durango State. The Company has made strategic investments in Golden Queen Mining Co. Ltd. and Corex Gold Corporation. The Company's Executive Office is located in Toronto, Ontario.

    <<
                             Cautionary Statement
    >>

Cautionary Note to US Investors - The United States Securities and Exchange Commission permits US mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. This press release uses certain terms, such as "measured," "indicated," and "inferred" "resources," that the SEC guidelines strictly prohibit US registered companies from including in their filings with the SEC. US Investors are urged to consider closely the disclosure in Gammon Gold's Annual Report on Form 40-F/A, which may be secured from Gammon Gold, or from the SEC's website at http://www.sec.gov/edgar.shtml.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Certain statements included herein, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "forecast", "may", "will", "schedule" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, future exploration results of its development program, the Company's ability to delineate additional resources and reserves as a result of such program, and the company's ability to mine such targets by mid-2011, statements regarding its financial exposure to litigation, targets, estimates and assumptions in respect of gold and silver production and prices, operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades, recovery rates, future financial or operating performance, margins, operating and exploration expenditures, costs and timing of completion of the Ocampo expansion program and improvements to the heap leach pad, costs and timing of the development and commencement of production of new deposits, costs and timing of construction, costs and timing of future exploration and reclamation expenses including, anticipated 2010 results, operating performance projections for 2010 and 2011, our ability to fully fund our business model internally, 2010 gold and silver production and the cash and operating costs associated therewith, the ability to achieve productivity and operational efficiencies, the ability to access grid power at Ocampo, further reduction in the open pit stripping ratio and the timing of each thereof. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Such factors include, among others, known and unknown uncertainties and risks relating to additional funding requirements, reserve and resource estimates, commodity prices, hedging activities, exploration, development and operating risks, illegal miners, political and foreign risk, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs, restrictions in the Company's loan facility, dependence on key employees, possible variations of ore grade or recovery rates, failure of plant, equipment or process to operate as anticipated, accidents and labour disputes. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

    <<
    Ocampo Proven & Probable Reserves(4)(5)(7)(8)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Mineral      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Category    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(1)
    -------------------------------------------------------------------------
    Open Pit
     Area(9)
    -------------------------------------------------------------------------
    Proven       30,355    0.39     15      0.64     380   14,843        620
    -------------------------------------------------------------------------
    Probable     33,933    0.37     15      0.62     408   16,510        676
    -------------------------------------------------------------------------
    Total Open
     Pit Area
     Proven &
     Probable    64,287    0.38     15      0.63     788   31,353      1,296
    -------------------------------------------------------------------------
    Underground
     Area
    -------------------------------------------------------------------------
    Proven        3,049    3.14    146      5.50     308   14,282        539
    -------------------------------------------------------------------------
    Probable      2,080    2.26    110      4.04     151    7,350        270
    -------------------------------------------------------------------------
    Total
     Underground
     Area Proven
     & Probable   5,130    2.79    131      4.91     459   21,632        810
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total
     Proven      33,404    0.64     27      1.08     688   29,125      1,160
    -------------------------------------------------------------------------
    Total
     Probable    36,013    0.48     21      0.82     560   23,860        946
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total
     Ocampo
     Proven &
     Probable    69,417    0.56     24      0.94   1,248   52,985      2,106
    -------------------------------------------------------------------------



    El Cubo Proven & Probable Reserves(4)(5)(7)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Mineral      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Category    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(1)
    -------------------------------------------------------------------------
    El Cubo
    -------------------------------------------------------------------------
    Proven        1,542    2.62    154      5.11     130    7,618        254
    -------------------------------------------------------------------------
    Probable      1,877    2.69    134      4.86     163    8,075        293
    -------------------------------------------------------------------------
    Total El
     Cubo Proven
     & Probable
     Reserves     3,419    2.66    143      4.97     293   15,694        547
    -------------------------------------------------------------------------
    Las Torres
     (Underground)
    -------------------------------------------------------------------------
    Proven          266    1.96    137      4.18      17    1,173         36
    -------------------------------------------------------------------------
    Probable        250    2.34    146      4.70      19    1,172         38
    -------------------------------------------------------------------------
    Total Las
     Torres Proven
     & Probable
     Reserves       516    2.14    141      4.43      36    2,345         74
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total Proven
     - El Cubo
     and Las
     Torres       1,808    2.53    151      4.98     147    8,791        289
    -------------------------------------------------------------------------
    Total
     Probable -
     El Cubo and
     Las Torres   2,127    2.65    135      4.84     181    9,247        331
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total Proven
     & Probable
     Reserves -
     El Cubo and
     Las Torres   3,936    2.59    143      4.90     328   18,038        620
    -------------------------------------------------------------------------



    Total Summary of Proven & Probable Reserves(4)(5)(7)(8)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Mineral      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Category    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(1)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total
     Proven      35,212    0.74     33      1.28     835   37,916      1,449
    -------------------------------------------------------------------------
    Total
     Probable    38,141    0.60     27      1.04     741   33,107      1,277
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total Proven
     & Probable
     Reserves    73,353    0.67     30      1.16   1,576   71,023      2,726
    -------------------------------------------------------------------------



    Ocampo Measured, Indicated & Inferred Resources(3)(4)(5)(7)(8)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Mineral      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Category    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(2)
    -------------------------------------------------------------------------
    Open Pit
     Area(9)
    -------------------------------------------------------------------------
    Measured     13,644    0.15      6      0.26      67    2,627        114
    -------------------------------------------------------------------------
    Indicated    20,037    0.20      8      0.34     126    5,127        219
    -------------------------------------------------------------------------
    Total Open
     Pit Area
     Measured &
     Indicated   33,682    0.18      7      0.31     192    7,754        333
    -------------------------------------------------------------------------
    Inferred     15,523    0.47     23      0.89     237   11,507        446
    -------------------------------------------------------------------------
    Underground
     Area
    -------------------------------------------------------------------------
    Measured        649    0.86     46      1.68      18      951         35
    -------------------------------------------------------------------------
    Indicated       628    0.87     45      1.69      18      911         34
    -------------------------------------------------------------------------
    Total
     Underground
     Measured &
     Indicated    1,277    0.86     45      1.69      35    1,862         69
    -------------------------------------------------------------------------
    Inferred      5,092    4.12    256      8.77     674   41,922      1,437
    -------------------------------------------------------------------------
    Summary -
     Total
     Measured &
     Indicated
    -------------------------------------------------------------------------
    Total
     Measured    14,294    0.18      8      0.33      84    3,579        150
    -------------------------------------------------------------------------
    Total
     Indicated   20,665    0.22      9      0.38     143    6,038        253
    -------------------------------------------------------------------------
    Total Ocampo
     Measured &
     Indicated   34,959    0.20      9      0.36     228    9,617        403
    -------------------------------------------------------------------------
    Summary -
     Total
     Inferred
    -------------------------------------------------------------------------
    Total Ocampo
     Inferred    20,615    1.37     81      2.84     911   53,428      1,883
    -------------------------------------------------------------------------



    El Cubo Measured, Indicated & Inferred Resources(3)(4)(5)(7)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Mineral      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Category    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(2)
    -------------------------------------------------------------------------
    El Cubo
    -------------------------------------------------------------------------
    Measured        149    1.80    121      4.00       9      579         19
    -------------------------------------------------------------------------
    Indicated       477    1.93    157      4.78      30    2,404         73
    -------------------------------------------------------------------------
    Total El
     Cubo
     Measured &
     Indicated      627    1.90    148      4.59      38    2,983         92
    -------------------------------------------------------------------------
    Inferred      3,499    3.29    176      6.49     370   19,788        730
    -------------------------------------------------------------------------
    Las Torres
    -------------------------------------------------------------------------
    Measured          8    1.73     54      2.71       0       13          1
    -------------------------------------------------------------------------
    Indicated        19    1.76     52      2.71       1       32          2
    -------------------------------------------------------------------------
    Total Las
     Torres
     Measured &
     Indicated       27    1.75     53      2.71       2       45          2
    -------------------------------------------------------------------------
    Inferred        546    4.12    169      7.20      72    2,973        126
    -------------------------------------------------------------------------
    Fenix Pit
    -------------------------------------------------------------------------
    Measured          -       -      -         -       -        -          -
    -------------------------------------------------------------------------
    Indicated     2,100    2.72     49      3.61     184    3,308        244
    -------------------------------------------------------------------------
    Total Fenix
     Pit Measured
     & Indicated  2,100    2.72     49      3.61     184    3,308        244
    -------------------------------------------------------------------------
    Inferred          -       -      -         -       -        -          -
    -------------------------------------------------------------------------
    Summary -
     Measured &
     Indicated
    -------------------------------------------------------------------------
    Total
     Measured -
     El Cubo and
     Las Torres     157    1.80    118      3.93       9      592         20
    -------------------------------------------------------------------------
    Total
     Indicated -
     El Cubo and
     Las Torres   2,597    2.57     69      3.82     214    5,744        319
    -------------------------------------------------------------------------
    Total
     Measured &
     Indicated -
     El Cubo and
     Las Torres   2,753    2.52     72      3.83     223    6,336        339
    -------------------------------------------------------------------------
    Summary -
     Inferred
    -------------------------------------------------------------------------
    Total
     Inferred -
     El Cubo and
     Las Torres   4,045    3.40    175      6.59     443   22,761        857
    -------------------------------------------------------------------------



    Guadalupe y Calvo Estimate of Inferred Resources(3)(4)(5)(7)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Deposit      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Location    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(2)
    -------------------------------------------------------------------------
    Rosario
     Bulk
     Tonnage
     (at 75% of
     available
     tonnes)     10,700    1.60     96      3.35     566   33,100      1,168
    -------------------------------------------------------------------------
    Rosario
     Underground
     (at 33% of
     available
     tonnes)        700   18.50    435     26.41     393    9,200        560
    -------------------------------------------------------------------------
    Rosario
    -------------------------------------------------------------------------
    Total
     Rosario
     Inferred    11,400    2.64    117      4.77     959   42,300      1,728
    -------------------------------------------------------------------------
    Nankin
     Underground
     (at 33% of
     available
     tonnes)        400    9.25    260     13.98     118    3,300        178
    -------------------------------------------------------------------------
    Nankin
    -------------------------------------------------------------------------
    Total Nankin
     Inferred       400    9.25    260     13.98     118    3,300        178
    -------------------------------------------------------------------------
    Summary -
     Inferred
    -------------------------------------------------------------------------
    Total Rosario
     and Nankin
     Inferred    11,800    2.84    120      5.02   1,077   45,600      1,906
    -------------------------------------------------------------------------



    Total Summary of Measured, Indicated and Inferred
Resources(3)(4)(5)(7)(8)(10)(11)
    -------------------------------------------------------------------------
                                                                     Gold
                                           Gold                      Equiv-
                                           Equiv-   Gold   Silver    alent
    Mineral      Tonnes   Gold    Silver   alent   Ounces  Ounces    Ounces
    Category    (000's) (g/t)(6) (g/t)(6) (g/t)(6) (000's) (000's) (000's)(2)
    -------------------------------------------------------------------------
    Summary -
     Measured &
     Indicated
    -------------------------------------------------------------------------
    Total
     Measured    14,450    0.20      9      0.36      94    4,171        169
    -------------------------------------------------------------------------
    Total
     Indicated   23,262    0.48     16      0.76     358   11,782        572
    -------------------------------------------------------------------------
    Total
    Measured &
     Indicated   37,712    0.37     13      0.61     451   15,953        741
    -------------------------------------------------------------------------
    Summary -
     Inferred
    -------------------------------------------------------------------------
    Total
     Inferred    36,460    2.07    104      3.96   2,431  121,789      4,645
    -------------------------------------------------------------------------


    Notes to Mineral Resources and Reserves Tables:

    (1)  Gold equivalent calculations use the reserve metal prices of
         $1025/oz for gold and $16.60/oz for silver for a gold to silver
         ratio of 61.75:1. Individual process recoveries are not factored
         into the gold to silver ratio calculation.
    (2)  Gold equivalent calculations use the resource metal prices of
         $1250/oz for gold and $22.75/oz for silver for a gold to silver
         ratio of 55.00:1. Individual process recoveries are not factored
         into the gold to silver ratio calculation.
    (3)  These Mineral Resources are in addition to Mineral Reserves. Mineral
         Resources that are not Mineral Reserves do not have demonstrated
         economic viability when calculated using Mineral Reserve
         assumptions.
    (4)  Reserves have been calculated in accordance with NI 43-101, as
         required by Canadian securities regulatory authorities. In addition,
         while the terms "Measured", "Indicated and "Inferred" Mineral
         Resources are required pursuant to NI 43-101, the SEC does not
         recognize such terms. Canadian standards differ significantly from
         the requirements of the SEC, and Mineral Resources disclosed in
         accordance with the requirements of the SEC. Investors should
         understand that "Inferred" Mineral Resources have a great amount of
         uncertainty as to their existence and great uncertainty as to their
         economic and legal feasibility. In addition, investors are cautioned
         not to assume that any part or all of Gammon's Mineral Resources
         constitute or will be converted into Reserves.
    (5)  Mineral Reserves and Resources have been calculated as at December
         31, 2010.
    (6)  Grade represents an average, weighted by reference to tons of ore
         type where several recovery processes apply.
    (7)  The metallurgical recovery applicable at each property and the cut-
         off grades used to determine Reserves as at December 31, 2010 are as
         follows:

                               Au                Ag
                          Metallurgical     Metallurgical    Cut-off Grade
         Mine              Recovery (%)      Recovery (%)         g/t
         --------------------------------------------------------------------
         Ocampo Open-
          Pit Mill              95                82       greater than 1.70
         Ocampo Open                                       greater than 0.17-
          Pit Leach             82                72                    1.70
         --------------------------------------------------------------------
         Ocampo
          Underground           95                82                    1.80
         --------------------------------------------------------------------
         El Cubo                90                88                    1.86

         All ores at Ocampo demonstrate similar metallurgical recoveries
         regardless of whether oxides are sulfides.

    (8)  The Ocampo Open Pit strip ratio is 2.7:1.
    (9)  The basis for the reserve estimation is the Whittle pit optimization
         methodology.
    (10) Sums may not add to totals due to rounding.
    (11) The following are the qualified persons responsible for mineral
         reserve and mineral resource estimates as at December 31, 2010.


    -------------------------------------------------------------------------
    Property                    Qualified Person
    -------------------------------------------------------------------------
    El Cubo - Excluding         Glenn R. Clark, P.Eng, Principal,
     Dolores & Capulin           Glenn R. Clark & Associates
    -------------------------------------------------------------------------
    Ocampo                      Ramon Luna, P. Geo, Director, Servicios
                                 y Proyectos Mineros De México S.A. de C.V.
    -------------------------------------------------------------------------
    Guadalupe y Calvo           Barton G. Stone, C.P.G., Chief Geologist,
                                 Pincock Allen & Holt,
                                Mark G. Stevens, C.P.G, former Pincock,
                                 Allen & Holt employee,
                                Clarence J. Wendt, P. Geo, Consulting
                                 Geologist, former Pincock, Allen & Holt
                                 employee
    -------------------------------------------------------------------------
    >>

SOURCE GAMMON GOLD INC.

For further information: please visit the Gammon Gold website at www.gammongold.com or contact: René Marion, President and Chief Executive Officer, Gammon Gold Inc., 416-646-3825; Anne Day, Director of Investor Relations, Gammon Gold Inc., 416-646-3825

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GAMMON GOLD INC.

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