Gammon Gold Denies Allegations in Class Action Claim and Receives Positive Report From Independent Firm

    TSX: GAM / AMEX:   GRS / BSX: GL7

    HALIFAX, March 13 /CNW/ - Gammon Gold Inc. (TSX: GAM / AMEX:   GRS) said
Thursday that the Company has been named as a defendant in a statement of
claim. The plaintiff is seeking, among other things, an order certifying the
action as a class proceeding and $80 million in damages. The statement of
claim has not yet been served on the Company.
    The plaintiff alleges that the Company's 2007 prospectus contained
misstatements with respect to production run rates and the adequacy of the
Company's internal controls. The plaintiff also alleges inappropriate option
    Gammon Gold considers the allegations in the statement of claim to be
without merit and intends to vigorously defend itself. The Company believes
that it acted with appropriate care, diligence and skill at all times.
    "The claim relating to the production run rates is a copycat claim, on a
class action basis, of a claim filed in New York courts last year," said Rene
Marion, CEO of Gammon Gold. "The Company has brought a motion asking the court
to dismiss that claim as groundless and lacking merit and is awaiting a
hearing on that issue. The Company denies the plaintiff's allegations that it
misled investors with respect to production run rates and considers the
allegations in this claim to be without merit and intends to vigorously defend
its position."
    Last year, the plaintiff's counsel wrote to the Company about potential
concerns with stock options granted between 2001 and 2007. McInnes Cooper, a
leading Nova Scotia law firm, was retained to steward an independent
investigation into the Company's options granting process and independent
consultants were retained to assist in the investigation.
    Following the investigation, McInnes Cooper reported to the Board that
with respect to the options granted by the Board between April 25, 2001 and
September 7, 2007, "there have been no violations of the Plan, or of the rules
of the TSX or applicable securities laws in the granting, pricing or reporting
by Gammon of the options granted pursuant to the Plan. Accordingly, no past or
present directors, officers or other employees of Gammon could have profited
from any improper exercise of options." At the time of this press release, the
McInnes Cooper report had not been made available to the plaintiff's counsel.
    Gammon Gold remains focused on meeting its short term deliverables
provided in the March 11, 2008 press release for the end of Q1.

    About Gammon Gold Inc.

    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

    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 reclamations
expenses. 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: please visit the Gammon Gold website at or contact: Rene Marion, Chief Executive Officer, Gammon
Gold Inc., (902) 468-0614; Anne Day, Director of Investor Relations, Gammon
Gold Inc., (902) 468-0614

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890