Gammon Gold to Re-File 2008 Financial Statements

    HALIFAX, Aug. 10 /CNW/ - Gammon Gold Inc. ("Gammon Gold") (TSX:GAM and
NYSE:  GRS) announced today that it intends to restate and re-file its audited
consolidated financial statements and MD&A for the year ended December 31,
    During the preparation of its interim consolidated financial statements
for the quarter ended June 30, 2009, the Company determined that certain items
in its consolidated financial statements for the year ended December 31, 2008
had been incorrectly translated into the Company's functional currency, the
United States dollar, and that upon initial adoption by the Company of CICA
Handbook Section 3031, Inventories, on January 1, 2008, a reversal should have
been recorded for previously recognized net realizable value adjustments.
    The more significant effects of the restatement on the Company's
consolidated financial statements for the year ended December 31, 2008 were to
increase net earnings for the period by US$9.8 million, or US$0.08 per share,
to US$40.0 million, or US$0.34 per share, and to increase balance sheet
inventories by US$10.8 million, to US$62.3 million.
    The Company notes that these changes are of a non-cash nature and do not
impact the Company's cash position or operating activities.
    The re-filing of the restated consolidated financial statements, revised
MD&A and any other required documents is expected to take place on August 12,
2009 and when completed, the restated consolidated financial statements and
the revised MD&A will be available for review under the Company's profile on
SEDAR at and on EDGAR as part of an amendment to the Company's
Annual Report on Form 40-F for the year ended December 31, 2008, at Upon request, following the filing of the amendment
to the Company's Annual Report on Form 40-F, the Corporation will provide a
hard copy of the Company's restated audited consolidated financial statements
free of charge.
    The Company's previously filed consolidated financial statements for the
year ended December 31, 2008 and the audit report thereon, together with the
auditors' report on the effectiveness of internal controls over financial
reporting as of December 31, 2008, should no longer be relied upon. Financial
information for the year ended December 31, 2008 which is contained in, or
incorporated by reference in, any disclosure document previously filed by the
Company, is superseded by the information contained in the amended and
restated financial statements described herein.

    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
Guadalupe y Calvo development property in Chihuahua State.

                             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 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

For further information:

For further information: please visit the Gammon Gold website at or contact: Scott Perry, Chief Financial Officer, Gammon
Gold Inc., (902) 468-0614; Anne Day, Director of Investor Relations, Gammon
Gold Inc., (902) 468-0614

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