Category: Silver / Gold

Gammon Gold Announces Further Positive Exploration Drilling Results and a Progress Update on the Scoping Study for the Guadalupe y Calvo Gold-Silver Project

Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): is pleased to announce further encouraging drilling results from our highly prospective Guadalupe y Calvo exploration property located in Chihuahua State, Mexico as a result of the recently enhanced exploration program currently underway.

"We continue to receive positive drill assay results that confirm the gold-silver potential of the Guadalupe y Calvo property. Drill results received to date indicate the potential for an underground mine below the previously identified open pit area where a significant number of high grade gold and silver intercepts have been received" stated Peter Drobeck, Senior Vice President of Exploration and Business Development of Gammon Gold.

Mr. Drobeck continued, "Based on the positive results to date, we will continue to accelerate the engineering evaluation of this property with the completion of a Scoping Study that is expected during Q1, 2009. The Scoping Study will focus primarily on the open pit target and could provide the basis for moving directly to Feasibility Study levels to accelerate the operational development of this asset."

As of the end of October, the Company had completed 152 diamond drill holes, totaling 30,640 meters (61%) of the planned 50,000 meter drill program at the Guadalupe y Calvo project in Chihuahua State, Mexico. The Company has received assays for 95 of these 152 completed diamond drill holes. These results now show that there is a substantial volume of potentially underground-mineable vein mineralization that is locally, very high grade. Of the 95 drill holes for which assays are available, 49 (52%) had cut a minimum of 2 meter lengths grading a minimum of 3 g/t gold equivalent using a 50:1 gold to silver ratio. This mineralization occurs over a 458 meter vertical interval, and a 600 meter horizontal strike length, and is open in three directions for further expansion. Two of the best drill intercepts to date are the deepest intercepts on the northwest portion of the drilled vein; hole GC-67 cut a true width of 1.9 meters grading 9.16 g/t gold and 686 g/t silver, and hole GC-68 cut a true width of 4.0 meters grading 5.11 g/t gold and 470 g/t silver. The Company is encouraged that the drilling is continuing to discover high grade gold-silver mineralization and presently has five diamond drills working at the property. Previous drilling results up to hole GC-74 were released by the Company on March 3, 2008 and September 3, 2008.

Results thus far support the extension of the mineralized zone along strike and at depth and continue to support the potential for both open pit and underground operations.

The Company has awarded contracts and is working on various aspects of the Scoping Study including reserve and resource modelling, open pit geotechnical modelling, open pit design, metallurgical testwork and process design to name a few. The Scoping Study is expected to be completed by the end of Q1 2009 and if positive it has been designed to facilitate a full transition into a Feasibility program to accelerate the development of this exciting prospective property. Preliminary bottle roll cyanidation tests on four sets of ore types have been carried out at the Ocampo metallurgical lab. These results are summarized in the following table:


    <<
    -------------------------------------------------------------------------
                     Bottle Roll Cyanidation Test Results
    -------------------------------------------------------------------------
    pH=10-10.5 (CaO)
    Time: 60 hours
    Size: 90-92% - 200 mesh (0.075 mm)
    -------------------------------------------------------------------------
    Composite            Recovery %
               -------------------------------
                 1 Variant*  2 Variant**
    -------------------------------------------------------------------------
                   Au      Ag      Au      Ag    Grade Category     Ore Type
    -------------------------------------------------------------------------
    GT-20       85.71   89.96   86.00   91.00        Middle Low      Mixture
                                                          Grade     Oxides &
                                                                   Sulphides
    -------------------------------------------------------------------------
    GT-14       78.95   84.47   77.00   87.00         Low Grade    Sulphides
    -------------------------------------------------------------------------
    GT-16       80.00   54.40   81.00   64.00         Low Grade    Sulphides
    -------------------------------------------------------------------------
    GT-45       98.45   91.94   98.00   92.00        High Grade       Oxides
    -------------------------------------------------------------------------
    * 1 variant - calculated using (head grade-grade in tailing)/head grade
        x 100%
    ** 2 variant - calculated using grade in solution/(grade in solution
           + grade in tailing) x 100%
    -------------------------------------------------------------------------


      - Gold and silver grades from all assayed drill holes available to date
        (from hole GC-1 to GC-95) with intercepts above a 3.0 g/t gold
        equivalent cut-off (using a 50:1 gold to silver ratio), average
        4.37 grams per tonne gold and 207 grams per tonne silver, over an
        average interval length of 2.9 metres.
      - Gold and silver grades from all drill holes to date with intercepts
        above a 0.3 g/t gold equivalent cut-off (using a 50:1 gold to silver
        ratio), average 0.76 grams per tonne gold and 48 grams per tonne
        silver, over an average interval of 16.1 metres.

    Recent highlights from the drilling programs are summarized in Table 1,
using a 3.0 g/t gold equivalent cut-off (using a 50:1 gold to silver ratio)
cutoff grade and Table 2, using a 0.3 g/t gold equivalent cut-off (using a
50:1 gold to silver ratio) cutoff grade.


    -------------------------------------------------------------------------
           Table 1: Guadalupe y Calvo Drill Hole Intercept Summary
                   3.0 g/t Gold-Equivalent External Cut-Off
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                        Gold-
                                    Inter-    True                      Equi-
                      From      To    val    Width    Gold  Silver    valent
                     --------------------------------------------------------
    Target     Hole     (m)     (m)    (m)      (m)   (g/t)   (g/t)  (g/t)*
    -------------------------------------------------------------------------
    Rosario   GC-79  272.0   275.0    3.0      2.9    5.58     244     10.46
    -------------------------------------------------------------------------
    Nankin    GC-80  100.0   102.0    2.0      2.0    4.24      17      4.57
    -------------------------------------------------------------------------
    Nankin    GC-83   81.7    84.8    3.1      3.0    7.15     135      9.85
    -------------------------------------------------------------------------
    Rosario   GC-85   55.0    57.0    2.0      2.0    0.28     138      3.04
    -------------------------------------------------------------------------
    Nankin    GC-89   61.3    64.0    2.7      2.5    1.96     152      5.01
    -------------------------------------------------------------------------
    Rosario   GC-91   60.1    63.1    3.0      3.0    4.21     230      8.81
    -------------------------------------------------------------------------
    Rosario   GC-92   74.5    76.0    1.5      1.5    1.48     314      7.76
    -------------------------------------------------------------------------
    Rosario   GC-93  110.5   112.5    2.0      2.0    1.27     112      3.51
    -------------------------------------------------------------------------
    Rosario   GC-94   39.0    42.0    3.0      2.0    2.65      85      4.35
    -------------------------------------------------------------------------
    Rosario   GC-94   70.0    73.0    3.0      1.5   13.61     166     16.94
    -------------------------------------------------------------------------
    Rosario   GC-95   34.3    36.5    2.2      2.2    2.41     150      5.40
    -------------------------------------------------------------------------
    +3.0 g/t cutoff
       Gold Equivalent Values were calculated based on 50 ounces of
       silver = 1 ounce of gold.
       Metallurgical Recoveries and Net Smelter Returns are Assumed to be
       100% No Capping.
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
           Table 2: Guadalupe y Calvo Drill Hole Intercept Summary
                   0.3 g/t Gold-Equivalent External Cut-Off
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                        Gold-
                                        Inter-                          Equi-
                         From      To     val       Gold   Silver     valent
                       ------------------------------------------------------
    Target       Hole      (m)     (m)     (m)      (g/t)    (g/t)   (g/t)*
    -------------------------------------------------------------------------
    Rosario     GC-79   270.0   288.0    18.0       1.44       58       2.61
    -------------------------------------------------------------------------
    Nankin      GC-80   100.0   105.0     5.0       2.11       15       2.40
    -------------------------------------------------------------------------
    Rosario     GC-80   329.0   335.0     6.0       0.38        3       0.44
    -------------------------------------------------------------------------
    Rosario     GC-82   111.0   117.0     6.0       0.42       33       1.09
    -------------------------------------------------------------------------
    Nankin      GC-83    81.7    87.2     5.5       4.11       84       5.78
    -------------------------------------------------------------------------
    Rosario     GC-84   192.1   198.5     6.4       0.34       10       0.54
    -------------------------------------------------------------------------
    Rosario     GC-85     6.0    65.0    54.7       0.26       32       0.91
    -------------------------------------------------------------------------
    Nankin      GC-88    74.0    98.0    24.0       0.18       21       0.59
    -------------------------------------------------------------------------
    Rosario     GC-88   142.3   150.0     7.7       0.64       20       1.04
    -------------------------------------------------------------------------
    Nankin      GC-89    54.6    65.0    10.5       0.73       58       1.88
    -------------------------------------------------------------------------
    Nankin      GC-89   165.0   177.0    12.0       0.43       10       0.62
    -------------------------------------------------------------------------
    Nankin      GC-90    59.0    69.0    10.0       0.39       48       1.34
    -------------------------------------------------------------------------
    Rosario     GC-90   201.0   213.0    12.0       0.51       28       1.06
    -------------------------------------------------------------------------
    Rosario     GC-91    57.0    72.0    15.0       1.03       89       2.82
    -------------------------------------------------------------------------
    Rosario     GC-92    50.0    82.0    25.0       2.18       72       3.63
    -------------------------------------------------------------------------
    Rosario     GC-93    93.6   122.2    28.6       0.57       41       1.39
    -------------------------------------------------------------------------
    Rosario     GC-94    28.0    47.9    19.9       0.57       37       1.32
    -------------------------------------------------------------------------
    Rosario     GC-94    54.0    82.0    28.0       1.98       64       3.25
    -------------------------------------------------------------------------
    Rosario     GC-95    26.8    40.4    13.6       0.65       52       1.68
    -------------------------------------------------------------------------
    +0.3 g/t cutoff
       Gold Equivalent Values were calculated based on 50 ounces of
       silver = 1 ounce of gold.
       Metallurgical Recoveries and Net Smelter Returns are Assumed to be
       100% No Capping.
    -------------------------------------------------------------------------

    This press release has been reviewed by Qualified Person Mr. Ramon Luna.
All sample analyses were performed by Chemex Laboratories, Vancouver, B.C.
using standard fire assay procedures.

    About Guadalupe y Calvo

    Guadalupe is a historic mining district. Bonanza grade gold and silver was
discovered on the property in 1835. Historic mining in the area produced
approximately 2-million ounces of gold and 28-million ounces of silver at
estimated production grades of 37 grams per tonne gold and 870 grams per tonne
silver. However, the district was only partially and selectively mined.
Historic mine operators focused only on the higher-grade zones in selected
upper portions of high-grade structures and stopped at water table depths of
200- to 250-metres.
    According to a report prepared by Pincock, Allen and Holt, in November
2002, the Guadalupe y Calvo Project contains inferred resources of 11,800
thousand tonnes grading 2.84 grams per tonne gold and 120 grams per tonne
silver for a gold equivalent grade of 4.69 grams per tonne at a gold to silver
ratio of 48.33:1 for 1.08-million ounces of gold and 45.6-million ounces of
silver or 2.02 million gold equivalent ounces. This estimate is based on
exploration work completed on the Rosario and Nankin structures and does not
address other mineralized structures on the property and potential for strike
extensions that are known to be present within the project boundaries.

    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 information regarding the Company contained herein may constitute
forward-looking statements within the meaning of applicable securities laws.
Forward-looking statements are subject to a variety of risks and uncertainties
which could cause actual events or results to differ from those reflected in
the forward-looking statements. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in forward looking
statements. Specific reference is made to "Risk Factors" in the Company's
Annual Information Form and Form 40-F Report. Forward-looking statements may
include estimates, plans, expectations, opinions, forecasts, projections,
guidance or other statements that are not statements of fact including,
without limitation, statements regarding potential mineralization and
reserves, including without limitation, statements regarding future cash costs
and production at El Cubo and Ocampo and the ability to continue to
successfully implement the Company's turn-around strategy, statements
regarding the resource growth potential of Guadalupe y Calvo, statements
regarding the company's ability to continue its improved cash flow
performance, the impact of any future exploration on reserve estimates;
expectations regarding the timing and extent of production at the Ocampo
project; the implications of the Mexican Single Rate Tax on future income tax
payments; estimates regarding the future costs related to exploration at
Ocampo; the nature and availability of additional funding sources; and future
plans and objectives of Gammon. In some cases, you can identify
forward-looking statements by the use of words such as may, will, should,
could, expect, plan, intend, anticipate, believe, estimate, predict, potential
or continue or the negative or other variations of these words, or other
comparable words or phrases. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from
the Company's expectations include, among others, risks related to
international operations, including political turmoil and limited local
infrastructure to support large scale mining operations; the actual results of
current exploration activities; conclusions of economic evaluations and
changes in project parameters as plans continue to be refined; and
fluctuations in future prices of gold and silver. These factors are set out in
the Company's Annual Information Form. The Company's forward-looking
statements are expressly qualified in their entirety by this cautionary
statement.
    >>

SOURCE: Gammon Gold Inc.

please visit the Gammon Gold website at www.gammongold.com or contact: Peter Drobeck, Senior Vice President of Explorations & Business Development, Gammon Gold Inc., (902) 468-0614; Anne Day, Director of Investor Relations, Gammon Gold Inc., (902) 468-0614

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