Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): is pleased to announce that despite the third quarter Mexican rainy season and the planned fewer ounces in production associated with the rainy season that typically impacts the heap leach facility, the mitigation strategies implemented at Ocampo were very effective and resulted in a total gold production improvement of 29% to 34,096 ounces as compared to 26,444 ounces in Q3 2007. Total silver production also improved by 23% to 1,372,123 ounces as compared to 1,115,233 ounces in Q3 2007, and represents one of the best quarterly production levels in the history of the Company. Despite the adverse gold to silver ratio during the quarter, gold equivalent production improved by 22% to 57,521 ounces as compared to 47,091 ounces in Q3 2007.
<<
Additional recent milestones and achievements also include:
Ocampo
------
- October average stacking rate of over 11,000 tonnes per day onto the
heap leach, which represents the highest on record to date
- October mill processing rate of over 1,850 tonnes per day, which
represents the highest average daily rate on record to date
- The mill processing plant capital upgrade to 2,400 - 2,600 tonnes per
day was completed at the end of October and the operation is currently
ramping up production to the enhanced capacity. Throughput on November
3, 2008 has already exceeded 2,350 tonnes without any apparent
operational issues or bottlenecks and we fully anticipate reaching and
maintaining the new rated capacity in the coming weeks
- In October the decision was made to install a third mill at the Ocampo
processing plant. The Marcey mill from El Cubo's Chirimetera plant was
moved to Ocampo in early October with the foundations and the
electrical room construction already approaching completion. This is
the second phase of the three-phase processing plant expansion program,
which is presently targeted to be completed in early Q2 2009, and will
increase throughput capacity by a further 10% with minimal capital
investment. The detailed engineering on the final processing capacity
(phase 3), which includes the installation of the Marcey mill and a
gravity circuit (phase 2), will be completed by the end of fiscal 2008
- New open pit sequencing plans were developed in early Q3 that allowed
for the immediate reduction in waste stripping requirements in August.
In conjunction with the reduction in haulage distances associated with
the new waste dumps and ore haulage road completed in mid-October these
initiatives should improve future open pit mining effectiveness
- In early October, a decision was made to stockpile lower grade ore from
the open pit for later stacking onto the heap leach pad. This will
improve the ore grades placed on the heap leach during this period of
high metal price volatility and defers heap leach capital
expansion requirements to 2010. Heap leach gold equivalent grades in
October increased by over 40% despite the adverse gold to silver ratio
during the month
El Cubo:
-------
- A workforce reduction of approximately 19% (over 230 people) took place
in Q3, for a total year-to-date reduction of approximately 31%, which
resulted in a more efficient and cost effective workforce
- The third processing mill was placed on care and maintenance during the
quarter as 100% of the underground production has now been routed to
the lower cost Las Torres processing plant
- The Las Torres processing plant capital projects were largely completed
during the quarter, allowing for substantial improvements in
metallurgical recoveries
- The 600 metre haulage level to Las Torres is currently operating at
over 60% capacity. The remaining locomotives and cars have been
ordered, which will allow full capacity to be achieved in the coming
quarters
"At the beginning of the year, the new management team at Gammon set an
aggressive list of commitments for 2008 and I am very pleased to advise our
shareholders that we continue to deliver on those objectives" stated Rene
Marion, Chief Executive Office of Gammon Gold Inc. He continued, "I am also
pleased to announce that the first phase of the capital expansion program
launched at the Ocampo mill facility is complete and that we are currently
ramping up production to the increased rated capacity of 2,400 to 2,600 tonnes
per day. The second phase of the planned expansion is currently underway that
will add additional capacity in Q2 2009."
"I am very pleased that the rainy season strategies that we launched in
2008 had such a positive impact on production at Ocampo in the third quarter"
stated Russell Tremayne, Chief Operating Officer of Gammon Gold Inc. He
continued, "The newly assembled mine management team at Ocampo has worked
diligently and effectively throughout the quarter, which resulted not only in
the substantial improvements in production that we achieved, but also the
concurrent completion of the expansion of the mill processing facility and the
heap leach facility both on time and on budget."
Gammon is also pleased to announce the discovery of a new underground
vein, San Amado, at the Ocampo mine. The Company's drilling at its Ocampo
Underground mine has recently discovered some very high-grade bonanza
mineralization on the San Amado Vein in the northeast portion of the
underground operation. This vein appears to be an extension of the San Juan -
Balmavera Vein System, which is one of the highest grade veins in the mine
complex. Two new drill intercepts that are over 100 meters from any past
exploration, show average values of:
- OU-426: 3.5m true thickness at 30.57 g/t Au + 2,126 g/t Ag (Average 2
sets of assays)
- OU-428: 2.5m true thickness at 82.40 g/t Au + 681 g/t Ag (Average 2
sets of assays)
This mineralization was intersected between 1,570 and 1,590 meter
elevations, and is open to expansion from these levels to the surface (at
1,800 to 1,900 meter elevations) as well as to the Northeast. The Company
plans to continue exploring this potentially rich new vein occurrence by
drifting and drilling.
All the Company's exploration core samples are split and sampled on-site
by Company personnel, then shipped in sealed bags to ALS Chemex Labs in
Hermosillo, Mexico and assayed by conventional Fire Assay methods. The Company
maintains a Quality Control program of pulp standards, blanks, and duplicate
samples inserted into assay batches. The Qualified Person for this is Ramon
Luna, Exploration Manager, Mexico.
"I am quite pleased to see such bonanza grades at what appears to be
longhole minable widths so early into our 2008 exploration program" stated Mr.
Peter Drobeck, Senior Vice President of Exploration and Business Development
of Gammon Gold Inc. He continued, "Consistent with our overall exploration
strategy at Ocampo we are currently running 2 drills at the open pits and 2
drills underground drilling down dip extensions and these new targets. In
addition to the drilling, grassroots fieldwork on several targets has been
ongoing."
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 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.
SOURCE: Gammon Gold Inc.
please visit the Gammon Gold website at www.gammongold.com 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