Gammon Announces Expanded $100 Million Credit Facility

By Gammon Gold Inc., PRNE
Thursday, November 4, 2010

TORONTO, November 5, 2010 - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): Gammon is pleased to
announce that it has signed an expanded line of credit facility of up to
US$100 million that will be provided equally by The Bank of Nova Scotia and
Societe Generale. The facility will mature in 36 months with interest payable
at a rate of LIBOR plus a margin of between 3.25-3.75%.

Under the terms of the new agreement the Company will have access to a
US$75 million credit facility that can be increased to US$100 million upon
the completion of the Capital Gold Corporation merger and associated
conditions. There are no operational covenants associated with the facility
nor are there any restrictions on the use of proceeds.

The new credit facility will enhance Gammon's liquidity profile and
provide additional financial flexibility to advance the Company's internal
growth strategy as well as leverage the operational and financial synergies
that would be targeted through the Capital Gold merger.

"We are pleased to have negotiated an increased revolving line of credit
facility with The Bank of Nova Scotia and Societe Generale as it demonstrates
the confidence our lenders have in our improving operations," stated Rene
, Chief Executive Officer and President of Gammon Gold. He continued,
"This credit facility, combined with our existing cash position and strong
operating cash flows, ensures we have the robust financial position required
to accelerate the Company's strategic growth program and, upon the completion
of the Capital Gold merger, immediately launch a strategic program to enhance
operational efficiencies at the El Chanate mine.

About Gammon Gold

Gammon Gold Inc. is a mid-tier gold and silver producer with properties
in Mexico. Gammon's flagship Ocampo Property in Chihuahua State achieved
commercial production in January 2007. Gammon also owns the suspended El Cubo
mine in Guanajuato State and has the promising Guadalupe y Calvo development
property in Chihuahua State. Gammon recently completed option purchase
agreements to acquire the Mezquite Project in Zacatecas State, Mexico and the
Venus project located north of the Ocampo mine. Gammon also recently signed a
definitive agreement to acquire the Los Jarros Project in Chihuahua State.
Since 2008, the Company has increased its Mexican land position by over 59%
and has made strategic investments in Golden Queen Mining Co. Ltd. and Corex
Gold Corporation. The Company's Executive Office is located in Toronto,

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/A, 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 the company's
financial position, cash flows, operational efficiencies, cash position,
financial synergies from the capital gold merger, 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 2010 and 2011 results, operating performance
projections for 2010 and 2011, our ability to fully fund our business model
internally, 2010 and 2011 gold and silver production and the cash and
operating costs associated therewith, the ability to achieve productivity and
operational efficiencies, further improvements to silver recoveries resulting
from improvements to the Ocampo mill 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.

For further information: For further information: please visit the Gammon
Gold website at or contact: Scott Perry, Chief
Financial Officer, Gammon Gold Inc., +1-416-646-3825; Anne Day, Director of
Investor Relations, Gammon Gold Inc., +1-902-468-0614

For further information: For further information: contact: Scott Perry, Chief Financial Officer, Gammon Gold Inc., +1-416-646-3825; Anne Day, Director of Investor Relations, Gammon Gold Inc., +1-902-468-0614

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