Gammon Reports Preliminary First Quarter Production of 55,480 Gold Equivalent Ounces at Cash Costs of $426 per Ounce



    TSX: GAM/NYSE:   GRS/BSX: GL7

    HALIFAX, April 14 /CNW/ - Gammon Gold Inc. ("Gammon") (TSX:GAM and
NYSE:  GRS): Gammon is pleased to report preliminary Q1, 2009 operating results
as highlighted below:

    
    Consolidated Highlights
    -----------------------

    -------------------------------------------------------------------------
                         Ocampo            El Cubo           Consolidated
                    Q1 2009  Q1 2008  Q1 2009  Q1 2008    Q1 2009    Q1 2008
    -------------------------------------------------------------------------
    Gold ounces
     produced        28,356   22,779    8,473   10,320     36,829     33,099
    Silver ounces
     produced       989,038  843,462  362,262  467,509  1,351,300  1,310,971
    Gold equivalent
     ounces
     produced        41,997   38,712   13,483   19,234     55,480     57,946
    Gold ounces
     sold            25,990   21,527    8,609    9,928     34,599     31,455
    Silver ounces
     sold           904,800  796,460  369,696  452,134  1,274,496  1,248,594
    Gold equivalent
     ounces sold     38,487   36,567   13,720   18,532     52,207     55,099
    Total cash
     costs per gold
     equivalent
     ounce             $391     $462     $524     $549       $426       $491
    Total cash
     costs per gold
     ounce             $140     $130     $290     $220       $177       $158
    Gold to Silver
     Ratio            72.23    52.13    70.09    52.85      71.47      52.42
    Realized Gold
     Price             $909     $921     $889     $939       $903       $928
    Realized Silver
     Price           $12.58   $17.67   $12.69   $17.77     $12.63     $17.69
    Gold equivalent
     ounces
     produced
     (55:1)(*)       46,338   38,115   15,060   18,820     57,772     56,935
    Total cash
     costs per gold
     equivalent
     ounce
     (55:1)(*)         $354     $469     $469     $561       $385       $500
    -------------------------------------------------------------------------

    (*) Comparative performance metrics using the Company's long term gold
        equivalency guidance ratio (55:1)

    - Consistent with previously provided guidance, first quarter production
      of 55,480 gold equivalent ounces was similar to production levels in
      Q3, 2008 with established operating performance levels meeting those
      targeted in the Company's full year guidance.
    - First quarter cash costs of $426 per gold equivalent ounce were
      significantly lower than the prior year corresponding period, which
      together with Ocampo's expanding productivity profile, positions the
      Company well for meeting the cost performance levels targeted in the
      Company's full year guidance.
    - Quarterly production is expected to grow significantly as a result of
      the strategic decision to accelerate the commissioning of the Phase II
      mill expansion at Ocampo in Q1, 2009. Accordingly, mill utilization in
      January and February was reduced to between 84% and 88%, so that the
      mill circuit could be upgraded, including electrics, additional pumps,
      pumping circuits and process controls to handle the increased flows.
    - Since commissioning the Phase II mill expansion at Ocampo on March 4,
      the mill has averaged 2,780 tonnes per day to March 31, at the top-end
      of the targeted throughput processing level.
    - Low grade ores were processed during the initial phase of the Ocampo
      Phase II commissioning until late March so that the circuit could be
      stabilized without jeopardizing recoveries. Head grades returned to
      normal levels thereafter and the mill facility alone recovered an
      average of over 340 ounces a day of gold and 12,870 ounces of silver
      per day for the last 7 operating days of March.
    - The gravity circuit equipment associated with Phase III of the Ocampo
      mill expansion has arrived on site and is currently being installed.
    - A total of 23,284 metres of exploration drilling has been completed at
      Ocampo during the quarter. In addition, 2,158 metres of exploration and
      ore development has been completed during the same period. Currently
      4 drills are on site, which is anticipated to grow to 7 or 8 drills
      during the second quarter.
    - The first exploration drill hole in 2009 on the Altagracia Target
      (east-southeast extension of the Ocampo Picacho open pit) returned
      16.5 metres at 6.52 grams per tonne gold and 59.1 grams per tonne
      silver for 7.60 grams per tonne gold equivalent, including 9.0 metres
      at 11.32 grams per tonne gold and 90.7 grams per tonne silver for
      12.97 grams per tonne gold equivalent, less than 40 metres below
      surface.
    

    "As targeted, quarterly production was in line with the Q3, 2008 period
despite the required downtime on milling operations and the intentional
processing of lower grade materials to effect the accelerated commissioning of
the Phase II mill expansion. The expanded mill is now fully commissioned and
is performing to design specifications, which together with the in-process
Phase III mill expansion, is expected to significantly benefit future
quarterly performance levels. Equally important, Company wide cash costs at
our 55:1 long term gold equivalency guidance reduced by 23% from the same
period in 2008. This performance continues to strengthen the Company's
financial foundation and for the sixth consecutive quarter we will be
reporting robust positive operating cash flows from consolidated operations
which strongly underpins our objective to continue operating as an internally
funded business model." stated René Marion, Gammon's Chief Executive Officer.

    About Gammon Gold

    Gammon Gold Inc. is a Nova Scotia based mid-tier gold and silver producer
with properties in Mexico. The Company's flagship Ocampo Project in Chihuahua
State achieved commercial production in January 2007. Gammon Gold also
operates its El Cubo operation in Guanajuato State and has the promising
development Guadalupe y Calvo property in Chihuahua State. The Company remains
100% unhedged.

    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 (File No. 001-31739), 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 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 the development of new deposits, costs and timing of
construction, costs and timing of future exploration and reclamation expenses
including, anticipated 2009 results, any decrease in cash costs for Q4 2008
and full year 2008 resulting from a reversal of the mark-to-market valuation
adjustment made in Q3 2008, our ability to fully fund our business model
internally, 2009 gold and silver production and the cash and operating costs
associated thereafter, the ability to achieve productivity and operational
efficiencies, the ability to complete the Phase II mill expansion, the
connection to the grid power, 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.




For further information:

For further information: Scott Perry, Chief Financial Officer, Gammon
Gold Inc., (902) 468-0614; Anne Day, Director of Investor Relations, Gammon
Gold Inc., (902) 468-0614; www.gammongold.com

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GAMMON GOLD INC.

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