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Gammon Gold Completes Successful 2010 Drilling Program at Ocampo and Announces New Discoveries and Additional High Grade Drill Intercepts


News provided by

Gammon Gold Inc.

07 Feb, 2011, 19:00 GMT

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TORONTO, February 7, 2011 /PRNewswire/ -- Gammon Gold Inc. ("Gammon") (TSX: GAM and NYSE:GRS) Gammon is pleased to provide an update of drill results from the Ocampo exploration program.

During 2010 the Company completed 137,393 metres of drilling at Ocampo with twelve drill rigs operating on surface and underground during the fourth quarter.

New Discoveries Recent Drilling Highlights

Polvorin

Drilling at the Polvorin target, located directly north of the mine offices, reported additional high-grade mineralization.

    
    - Drilling highlights include:
      - Hole OG-1213, 0.5 metres grading 121.69 grams per tonne gold
        equivalent(1)

Refugio Norte

Drilling at the Refugio Norte target zone, located southeast of the mine offices and on the north side of the Refugio open pit, reported very high-grade mineralization.

    
    - Drilling highlights include:
      - Hole OG-1194, 0.8 metres grading 172.71 grams per tonne gold
        equivalent(1)

Resurrecion

Drilling began on the Resurrecion vein and shear zone during the fourth quarter. The Resurrecion target is located on the east side of the town of Ocampo and projects downward into the existing North-East mine complex and has reported high-grade mineralization.

    
    - Drilling Highlights include:
      - Hole OG-1155, 0.8 metres grading 26.58 grams per tonne gold
        equivalent(1)

Candelaria

Drilling on the Candelaria target, located directly under the Picacho open pit, reported encouraging results.

    
    - Drilling Highlights include:
      - Hole OG-1149, 0.6 metres grading 7.30 grams per tonne gold
        equivalent(1)


    Key Drilling Highlights on Existing Veins

    Altagracia

    - Drilling highlights include:
      - Hole OG-1150, 2.3 metres grading 5.63 grams per tonne gold
        equivalent(1)
      - Hole OG-1164, 7.1 metres grading 9.86 grams per tonne gold
        equivalent(1)
      - Hole OG-1212, 1.2 metres grading 23.75 grams per tonne gold
        equivalent(1)
      - Hole OG-1217, 1.5 metres grading 6.72 grams per tonne gold
        equivalent(1)

    Balvanera

    - Drilling highlights include:
      - Hole OG-1134, 1.3 metres grading 9.07 grams per tonne gold
        equivalent(1)
      - Hole OG-1143, 1.3 metres grading 6.37 grams per tonne gold
        equivalent(1)
      - Hole OG-1143, 0.6 metres grading 39.74 grams per tonne gold
        equivalent(1)
      - Hole OG-1195, 0.5 metres grading 19.29 grams per tonne gold
        equivalent(1)
      - Hole OG-1195, 2.6 metres grading 9.93 grams per tonne gold
        equivalent(1)

    Aventurero and LaMore

    - Drilling highlights include:
      - Hole OG-1185, 0.7 metres grading 25.24 grams per tonne gold
        equivalent(1)
      - Hole OG-1185, 0.8 metres grading 10.67 grams per tonne gold
        equivalent(1)
      - Hole OG-1197, 2.5 metres grading 11.33 grams per tonne gold
        equivalent(1)

    Belen

    - Drilling highlights include:
      - Hole OG-1245, 0.5 metres grading 3.15 grams per tonne gold
        equivalent(1)
      - Hole OG-1254, 1.0 metres grading 6.15 grams per tonne gold
        equivalent(1)

"We are very encouraged by the continuing positive results from our exploration program that supports the significant upside potential at Ocampo. The Company's 2010 drilling program has clearly shown that the existing veins at Ocampo are open in four lateral directions." stated Peter Drobeck, Sr. Vice President of Exploration and Business Development. He continued, "Our 2011 exploration program is well underway with five surface core rigs and six underground drill rigs working and we anticipate continuing to report positive results at Ocampo and our expanded land packages."

Altagracia Target

Work over the past year showed that the Altagracia Target area is divided into two parts, separated by a post-mineral fault zone. Lower Altagracia drilling cut numerous high-grade intercepts that now indicate a 300-meter vertical interval of mineralization that is only 250 metres from existing underground infrastructure. The results received to date supports extension of planned underground development from Belen to Altagracia, which will ultimately connect the North-East underground operations to the PGR trend, or open pit zone, two kilometers to the south.

Drilling at the Altagracia Mine target, just 270 metres further to the east, has cut numerous anomalous intercepts following up earlier ore-grade intercepts from last year, and this is now planned for in-fill drilling to calculate a resource and potentially reserves.

Balvanera Vein

The Company presently mines the Balvanera vein in the North-East underground complex, but it has not been mined above the 1720 level. Drilling completed over the past 3 months has defined strong mineralization in this vein from near-surface to the 1720 metre level, a vertical interval of 120 to 170 metres from surface. This vein can be easily accessed from existing infrastructure.

Aventurero Vein and LaMore Vein

In addition to the exciting results at the Balvanera, nearby exploration on the Aventurero vein and LaMore vein have shown equally encouraging high-grade mineralization.

Note: The Ocampo drilling results have been reviewed by Qualified Person, Mr. Peter Drobeck. All sample analyses for Ocampo surface exploration drilling were performed by ALS-Chemex Laboratories, based in Vancouver, British Columbia, using standard fire assay procedures with AA finish. The Company has an established program of inserting certified control samples and blanks in compliance with best practices, and this program is used at Ocampo Company policies. Sample lengths are not necessarily true widths.

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 suspended 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, 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.

    
    TABLE 1:

    Select New Drill Results from Ocampo Surface Exploration Program, Q4 2010

    Drill Hole From (m) To (m) Length (m)  Gold  Silver AuEq(1)      Vein
                                           (g/t)  (g/t)   (g/t)
     OG-1150     105.7  108.1        2.3   5.29     19    5.63     Altagracia
                                                                        Lower
     OG-1164     107.2  114.3        7.1   7.69    119    9.86     Altagracia
                                                                        Lower
     OG-1174      87.9   89.0        1.1   1.26    239    5.59     Altagracia
                                                                        Lower
     OG-1212      61.7   62.8        1.2  17.30    355   23.75     Altagracia
                                                                         Mina
     OG-1217      40.4   41.0        0.6   0.66    129    3.01     Altagracia
                                                                         Mina
     OG-1217      82.0   83.0        1.0   2.70     68    3.94     Altagracia
                                                                         Mina
     OG-1217      92.9   94.4        1.5   6.11     33    6.72     Altagracia
                                                                         Mina
     OG-1223      56.7   57.5        0.8   3.41     13    3.65     Altagracia
                                                                         Mina
     OG-1228      28.8   29.8        1.0   3.65     10    3.83     Altagracia
                                                                         Mina
     OG-1122       4.2    6.1        1.9   3.21     66    4.41     Aventurero
                                                                     near Bal.
     OG-1185     114.7  115.4        0.7  14.55    588   25.24     Aventurero
                                                                     near Bal.
     OG-1185     122.5  123.4        0.8   8.20    136   10.67     Aventurero
                                                                     near Bal.
     OG-1197      81.7   84.2        2.5   8.83    138   11.33     Aventurero
                                                                     near Bal.
     OG-1251      59.5   61.0        1.5   1.89     38    2.59     Aventurero
                                                                      Nivel 2
     OG-1251      66.0   66.8        0.8   9.15     45    9.97     Aventurero
                                                                      Nivel 2
     OG-1256      34.6   35.2        0.6   3.73     68    4.97     Aventurero
                                                                      Nivel 2
     OG-1256      37.9   38.4        0.5   2.56      8    2.71     Aventurero
                                                                      Nivel 2
     OG-1259      56.2   60.5        4.3  27.65    416   35.22     Aventurero
                                                                      Nivel 2
     OG-1234      40.7   41.3        0.6   2.35     34    2.97  Aventurero SE
     OG-1130      16.3   16.9        0.6   4.19     24    4.63      Balvanera
     OG-1134      19.3   20.6        1.3   8.89     10    9.07      Balvanera
     OG-1143      19.5   20.8        1.3   6.05     18    6.37      Balvanera
     OG-1143      21.7   24.8        3.1   2.53     14    2.77      Balvanera
     OG-1143      24.8   25.3        0.6  33.70    332   39.74      Balvanera
     OG-1195      24.8   25.3        0.5  18.60     38   19.29      Balvanera
     OG-1195      31.2   33.8        2.6   8.82     61    9.93      Balvanera
     OG-1211      74.0   75.3        1.3   0.07    140    2.62      Balvanera
     OG-1191      67.8   68.4        0.7   1.60    158    4.47 Balvanera-More
     OG-1197      54.1   55.6        1.6   6.32    162    9.26 Balvanera-More
     OG-1197      57.7   59.8        2.1   3.68    138    6.18 Balvanera-More
     OG-1201      56.2   59.2        3.1   3.23    355    9.68 Balvanera-More


    TABLE 1:

    Select New Drill Results from Ocampo Surface Exploration Program, Q4 2010
    (cont'd)

    Drill Hole From (m) To (m) Length  Gold  Silver AuEq(1)        Vein
                                (m)   (g/t)  (g/t)   (g/t)
    OG-1245       70.2   70.7    0.5   2.05     61    3.15         Belen Alto
    OG-1254       48.3   49.3    1.0   2.25    215    6.15         Belen Alto
    OG-1224       25.0   27.0    2.0   0.56     51    1.49          Dog Clavo
    OG-1224       61.4   62.5    1.1   3.77    138    6.28          Dog Clavo
    OG-1181       79.6   80.6    1.0   0.07    300    5.52            La More
    OG-1185       56.0   57.3    1.3   2.64     96    4.38            La More
    OG-1149      158.6  159.7    1.1   3.29     18    3.62 Picacho-Candelaria
    OG-1149      163.3  163.9    0.6   6.95     19    7.30 Picacho-Candelaria
    OG-1213       99.9  100.5    0.5  48.60   4020  121.69           Polvorin
    OG-1194       11.6   12.4    0.8 169.00    204  172.71      Refugio Norte
    OG-1194       31.1   32.4    1.4   3.35     18    3.68      Refugio Norte
    OG-1176       57.3   58.0    0.7   3.57    294    8.92       Res. Sistema
                                                                 40degrees Az
    OG-1176      140.6  141.5    0.8   1.73    103    3.60       Res. Sistema
                                                                 40degrees Az
    OG-1100       88.7   89.4    0.7   4.13     67    5.35       Resurreccion
    OG-1127       20.1   20.8    0.8   3.11    123    5.35       Resurreccion
    OG-1127       73.2   73.8    0.5   1.55    230    5.73       Resurreccion
    OG-1140       33.9   34.9    1.0   1.79    108    3.75       Resurreccion
    OG-1155       18.5   19.3    0.8  18.25    458   26.58       Resurreccion
    OG-1155       22.0   22.6    0.7   2.18     54    3.16       Resurreccion
    OG-1141       47.3   47.8    0.5   2.36     29    2.89    Stock Work Hill

Note: The Ocampo drilling results have been reviewed by Qualified Person, Mr. Peter Drobeck. All sample analyses for Ocampo surface exploration drilling were performed by ALS-Chemex Laboratories, based in Vancouver, British Columbia, using standard fire assay procedures with AA finish. The Company has an established program of inserting certified control samples and blanks in compliance with best practices, and this program is used at Ocampo Company policies. Sample lengths are not necessarily true widths.

To view the Ocampo Plan Map, please go to http://files.newswire.ca/258/Ocampo_Plan_Map.doc.

For further information:

For further information please visit the Gammon gold website at http://www.gammongold.com or contact:

    
    Peter Drobeck                              Anne Day
    Sr. VP Exploration & Business Development  Director of Investor Relations
    Gammon Gold Inc.                           Gammon Gold Inc.
    +1-416-646-3825                            +1-416-646-3825

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