Gammon Gold Announces Discovery of New Drill Target at the Venus Project and Provides an Update on the Continued Progress at Guadalupe y Calvo

TORONTO, August 17, 2010 - TSX: GAM / NYSE: GRS / BSX: GL7

Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS) is pleased to
announce the discovery of an encouraging new drill target at the Venus
project located in the Ocampo - Pinos Altos region, as well as update on the
continued progress at the advanced Guadalupe y Calvo development property.

"In recent months, the Company has significantly increased its land
position in the Ocampo - Pinos Altos region that includes the Venus property
located north of Ocampo. This growth strategy of increasing our land position
in this highly competitive area is already providing encouraging results
where, at the Venus property, we have already identified a new drill target
associated with the La Boleta Vein. We expect to launch a drilling program to
follow up on this and other potential targets shortly," stated Peter Drobeck,
Senior Vice President of Exploration and Business Development. "Additionally,
drilling at our advanced development project, Guadalupe y Calvo, continues to
report encouraging results. During the past month we reported another
high-grade intercept that extends the strike length of the Rosario vein by
350 metres and we remain on target for delivering a scoping study that is
anticipated to be completed during the fourth quarter."

VENUS PROJECT UPDATE

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The Company's exploration program at the Venus Project, located directly
north of the Ocampo land package, has identified a high-quality drill target
known as the "La Boleta". Preliminary work has defined a very strong surface
gold-silver anomaly in association with veins, sheeted veinlets and vein
stockworks.

During mapping of the Venus property an area of numerous small veinlets
and stockworks associated with the La Boleta Vein was identified as a
significant target for potential open-pit and underground mineable
mineralization, similar in style to the nearby Ocampo and Pinos Altos
districts (files.newswire.ca/258/Ocampo_Area_Map.pdf). A drilling
program on this property will be launched during the quarter that will target
this and other potential targets. Subsequent detailed mapping and surface
rock-chip sampling has defined a target with surface dimensions of 400 metres
long by up to 150 metres wide, within which there are a myriad of small veins
and sheeted vein occurrences. A sub-parallel vein system was also identified
that has 600 metres of strike length. Of the 234 surface geochemistry samples
collected on the target to date, 101 (43%) contained over 0.20 grams per
tonne gold equivalent(1). If gold values are capped at 8.00 grams per tonne,
these 101 samples average 1.55 grams per tonne gold equivalent(1). Maximum
values in the first pass sampling were 25.08 grams per tonne gold and 210
grams per tonne silver.

GUADALUPE Y CALVO EXPLORATION PROJECT UPDATE

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The success of our drilling program at the Guadalupe y Calvo continues
and recent results indicate that the Rosario Vein continues for another 200
metres, which extends the strikelength of the vein by approximately 350
metres from the detailed drilling completed in 2008. The most recent drill
results from Hole GC-188 intersected the vein at a depth well below the
detailed drilling conducted in 2008 and had an intercept of 0.7 metres
grading 48.25 grams per tonne gold and 525 grams per tonne silver, or 57.80
grams per tonne gold equivalent(1). (Refer to Table 1).

The Company has received preliminary results from bottle roll
metallurgical tests performed by Mountain States Research & Development Inc.
of Tucson, where four samples of -100 mesh ores averaged 93% gold recovery
and 69% silver recovery. Further testing is underway, including additional
bottle roll tests and column leach tests on one-half and one-quarter inch
size fractions.

Note: The Guadalupe y Calvo exploration information has been reviewed by
Qualified Person, Mr. Peter Drobeck. All sample analyses reported herein for
Guadalupe y Calvo were performed by SGS Laboratories, based in Mississauga,
Ontario, using standard fire assay procedures and with ICP finish. Drilled
lengths do not necessarily represent true widths. Gammon maintains a Quality
Assurance and Quality Control program that includes insertion of
commercially-purchased pulp control samples and blanks to insure laboratory
accuracy.

GROWING PORTFOLIO OF PROPERTIES

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The Company's portfolio of properties has been significantly enhanced
through the addition of three new prospective exploration properties in
Mexico. The Company has expanded its land position in the Mexico 59% during
2010 through separate option agreements to acquire the Venus and Los Jarros
properties located directly north and east of the Ocampo and Pinos Altos
properties, through staking of new concessions west of Ocampo, and by its
purchase option on the Mezquite Project in Zacatecas, Mexico.

This press release sets out the gold and silver grades found in the
samples taken from various targets. Not all of these targets have been
categorized as a mineral resource deposit under applicable Canadian mineral
resource reporting standards, and it is uncertain if further exploration will
result in these targets being delineated as mineral resources. The grades
encountered so far should not be taken as representative of the ore bodies in
question as there has been insufficient exploration to define a mineral
resource, and such grades may not prove representative of the deposits if and
when the same are delineated as mineral resources.

About Gammon Gold

Gammon Gold Inc. is a 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 owns the suspended El
Cubo mine in Guanajuato State and has the promising Guadalupe y Calvo
development property in Chihuahua State. The Company recently completed
option purchase agreements to acquire the Mezquite Project in Zacatecas
State, Mexico and the Venus Project located north of the Ocampo mine in
Chihuahua State, Mexico. It also has recently signed a Letter of Intent to
acquire the Los Jarros Project in Chihuahua State, Mexico. Since 2008, the
Company has significantly increased its 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, 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
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 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, 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: Guadalupe y Calvo Drill Results, 2010

    -------------------------------------------------------------------------
    Hole          From       To   Length     Gold   Silver  Gold Eq.  Target
                                             (g/t)    (g/t)    (g/t)
    -------------------------------------------------------------------------
    GC-0183(x)   173.7    175.1      1.4     1.43       57     2.46  Rosario
    -------------------------------------------------------------------------
    GC-0183(x)   207.4    215.4      8.0     1.85       34     2.47  Rosario
    -------------------------------------------------------------------------
      Including  214.4    215.4      1.0    11.45       21    11.83  Rosario
    -------------------------------------------------------------------------
    GC-0185(x)   386.6    387.7      1.1    62.37       56    63.39  Rosario
    -------------------------------------------------------------------------
    GC-0186      526.0    528.0      2.0     1.93       75     3.30  Rosario
    -------------------------------------------------------------------------
    GC-0188      710.2    710.9      0.7    48.25      525    57.80  Rosario
    -------------------------------------------------------------------------
    (x) Previously released results

Note: The Guadalupe y Calvo exploration information has been reviewed by
Qualified Person, Mr. Peter Drobeck. All sample analyses reported herein for
Guadalupe y Calvo were performed by SGS Laboratories, based in Mississauga,
Ontario, using standard fire assay procedures and with ICP finish. Drilled
lengths do not necessarily represent true widths. Gammon maintains a Quality
Assurance and Quality Control program that includes insertion of
commercially-purchased pulp control samples and blanks to insure laboratory
accuracy.

(1) Gold equivalent ounces include silver ounces produced and converted
to a gold equivalent, based on the Company's long-term gold equivalency ratio
of 55:1

For further information: please visit the Gammon gold website at
www.gammongold.com or contact: Peter Drobeck, Sr. VP Exploration &
Business Development, Gammon Gold Inc., +1-416-646-3825; Anne Day, Director
of Investor Relations, Gammon Gold Inc., +1-902-468-0614

Contact: Peter Drobeck, Sr. VP Exploration & Business Development, Gammon Gold Inc., +1-416-646-3825; Anne Day, Director of Investor Relations, Gammon Gold Inc., +1-902-468-0614