Gammon Gold Inc. Adopts a Shareholder Rights Plan

TSX: GAM / NYSE: GRS / BSX: GL7

TORONTO, Aug. 19 /CNW/ - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE: GRS): announced today that its Board of Directors has approved the adoption of a shareholder rights plan agreement (the "Plan") effective August 19, 2010 (the "Effective Date"). The Plan is designed to ensure that Gammon's shareholders are treated fairly in the event of a take-over bid for Gammon's common shares and that Gammon's Board of Directors and shareholders will have adequate time to evaluate any unsolicited take-over bid and, if appropriate, evaluate and pursue other alternatives to maximize shareholder value.

The Plan was not adopted in response to any actual or threatened take-over bid or other proposal from a third party to acquire control of Gammon and is not intended to block take-over bids. The Plan is similar to shareholder rights plans adopted by other Canadian companies.

The plan has been conditionally accepted for filing by the Toronto Stock Exchange subject to shareholder approval. The Plan must be confirmed by the shareholders within six months from the Effective Date and Gammon intends to seek shareholder approval of the Plan at a special meeting of shareholders to be held within such time frame. The Plan is also subject to certain other regulatory approvals, including approval by the New York Stock Exchange.

At the close of business on the Effective Date, one right (a "Right") will be issued and attached to each common share of Gammon outstanding at that time and to each common share issued after the Effective Date.

About Gammon Gold
Gammon Gold Inc. is a mid-tier gold and silver producer with properties in Mexico. Gammon's flagship Ocampo Property in Chihuahua State achieved commercial production in January 2007. Gammon Gold also owns the suspended El Cubo mine in Guanajuato State and has the promising Guadalupe y Calvo development property in Chihuahua State. Gammon recently completed option purchase agreements to acquire the Mezquite Project in Zacatecas State, Mexico and the Venus Project located north of the Ocampo mine. Gammon also recently signed a Letter of Intent to acquire the Los Jarros Project in Chihuahua State. Since 2008, the Company has increased its Mexican land position by over 59% and 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, statements regarding the carrying value of El Cubo, 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, the duration of the suspension of operations at El Cubo and our ability to reopen such operations, the financial and operating effects of the suspension of operations at El Cubo, 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, 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.

SOURCE GAMMON GOLD INC.

For further information: For further information:

Please visit the Gammon Gold website at www.gammongold.com or contact:

Rene Marion
President and Chief Executive Officer              
Gammon Gold Inc.
416-646-3825
Anne Day
Director of Investor Relations
Gammon Gold Inc.
902-468-0614

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GAMMON GOLD INC.

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