Gammon Gold Inc Adopts a Shareholder Rights Plan

TORONTO, August 19, 2010 - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): announced today that
its Board of Directors has approved the adoption of a shareholder rights plan
agreement (the "Plan") effective August 19, 2010 (the "Effective Date"). The
Plan is designed to ensure that Gammon's shareholders are treated fairly in
the event of a take-over bid for Gammon's common shares and that Gammon's
Board of Directors and shareholders will have adequate time to evaluate any
unsolicited take-over bid and, if appropriate, evaluate and pursue other
alternatives to maximize shareholder value.

The Plan was not adopted in response to any actual or threatened
take-over bid or other proposal from a third party to acquire control of
Gammon and is not intended to block take-over bids. The Plan is similar to
shareholder rights plans adopted by other Canadian companies.

The plan has been conditionally accepted for filing by the Toronto Stock
Exchange subject to shareholder approval. The Plan must be confirmed by the
shareholders within six months from the Effective Date and Gammon intends to
seek shareholder approval of the Plan at a special meeting of shareholders to
be held within such time frame. The Plan is also subject to certain other
regulatory approvals, including approval by the New York Stock Exchange.

At the close of business on the Effective Date, one right (a "Right")
will be issued and attached to each common share of Gammon outstanding at
that time and to each common share issued after the Effective Date.

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 Gold 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 Letter of Intent 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, 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/A, 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 the carrying
value of El Cubo, 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, the
duration of the suspension of operations at El Cubo and our ability to reopen
such operations, the financial and operating effects of the suspension of
operations at El Cubo, 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.

For further information: For further information: please visit the Gammon
Gold website at www.gammongold.com or contact: Rene Marion, President
and Chief Executive 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: please contact: Rene Marion, President
and Chief Executive Officer, Gammon Gold Inc., +1-416-646-3825; Anne Day,
Director of Investor Relations, Gammon Gold Inc., +1-902-468-0614