Gammon Gold Reports Third Quarter Financial Results

Reports Cash Flow of $31.2 Million (+99% over Q2, 2010) as Ocampo Continues To Improve

TORONTO, November 8, 2010 - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): announces its
financial results for the three and nine months ended September 30, 2010. All
figures reported are in U.S. dollars unless otherwise indicated.

Third Quarter Key Financial Highlights

In the third quarter, the Company reported:

    - Excluding cash flows of negative $4.0 million related to El Cubo, the
    Company reported positive cash flow from operations of $35.2 million, or
    $0.25 per share, as compared to $13.9 million, or $0.11 per share, in the
    same period in 2009, a $21.3 million, or $0.14 per share improvement.

    - Excluding a $4.9 million loss before other items related to El Cubo,
    earnings before other items were $16.0 million, or $0.12 per share, as
    compared to a loss before other items of $2.1 million, or $0.02 per
    share, in the same period in 2009, an $18.1 million, or $0.14 per share
    improvement.

    - Excluding a $5.9 million net loss related to El Cubo, net earnings were
    $13.4 million, or $0.10 per share, as compared to a net loss of $1.2
    million, or $0.01 per share, in the same period in 2009, a $14.6 million,
    or $0.11 per share improvement.

    - On a consolidated basis, positive net free cash flow of $3.9 million as
    compared to negative net free cash flow of $4.6 million in the same
    period in 2009, an $8.5 million, or a $0.06 per share improvement.

    - Cash costs at Ocampo were $411 per gold equivalent(*) ounce as compared
    to $406 per gold equivalent(*) ounce for the same period in 2009.
    Utilizing Ocampo's silver revenues as a by-product cost credit, third
    quarter total cash costs were negative $121 per gold ounce sold as
    compared to a positive $83 per gold ounce sold for the same period in
    2009.

"As productivities at Ocampo improve quarter over quarter and cash costs
decrease, we continue to experience very encouraging results. The Ocampo mine
reported cash costs of $411 per gold equivalent ounce(*), which is below
industry average and represents a margin of 67% of the average realized gold
price in the quarter." stated Rene Marion, President and Chief Executive
Officer. He continued, "Our improving operations and significant cash flow
stream continue to provide the leverage required to advance our growth
program as well as the next stage in our strategic growth program."

Additional Third Quarter Key Highlights

    - Revenues for the third quarter were $55.5 million as compared to $47.9
    million in the same period in 2009. During the quarter the Company
    realized an average gold and silver price of $1,230 per ounce and $19.19
    per ounce, respectively.

    - Cash of $107.0 million, a $94.7 million increase in cash on hand since
    September 30, 2009. The Company's improved cash flow profile and
    strengthened Balance Sheet continues to provide management with
    considerable flexibility in advancing its strategic growth programs

    - As reported on October 12, 2010, production from the Ocampo mine was
    48,650 gold equivalent(*) ounces (27,018 gold ounces and 1,189,769 silver
    ounces) as compared to 41,387 gold equivalent(*) ounces (24,145 gold
    ounces and 948,263 silver ounces), an 18% improvement over the same
    period in 2009.

    - Margins as a percentage of the average realized gold price in the
    quarter were 67% at Ocampo as compared to 58% in the same period in 2009,
    a 9% improvement.

    - Based on the positive results reported from the Ocampo mine to date,
    the Company is reconfirming its 2010 guidance for Ocampo (assuming a gold
    equivalency rate of 55:1 and a Mexican peso to US dollar exchange rate of
    12.5):

    - Gold production of 100,000 - 110,000 ounces;

    - Silver production of 4,400,000 - 4,950,000 ounces;

    - Gold equivalent production of 180,000 - 200,000 ounces; and

    - Total cash costs per gold equivalent ounce of $410 - $435, reduced from
    $425-$450.

    - On November 5, 2010, the Company announced that it had negotiated an
    expanded credit facility of up to a $100 million revolving line of credit
    that will be provided equally by The Bank of Nova Scotia and Societe
    Generale. The facility will mature 36 months from the date of closing.
    Interest payable is based on LIBOR plus a margin of between 3.25-3.75%.

Ocampo Operations Improving

As reported on October 12, 2010, the Ocampo mine reported improved
production and cash costs during the third quarter despite above average
seasonal rainfall experienced in the third quarter. The Ocampo mine reported
quarter over quarter improvements in most key operating metrics during the
quarter including:

    - Production from the NE underground mine continued to exceed targeted
    levels and reported an average of 1,596 tonnes per day, above the target
    of 1,500 tonnes per day.

    - The combined development at the NE and Santa Eduviges underground mines
    increased to 6,546 metres during the quarter as compared to 4,164 metres
    in the same period in 2009. The Company anticipates that the Santa
    Eduviges mine will be commissioning later in the fourth quarter and will
    initially contribute 250 tonnes per day and subsequently ramp up to 500
    tonnes per day in 2011. The accelerated development achieved in the
    quarter has been supported by the redeployment of contract workers from
    El Cubo in late June.

    - Production from the open pits averaged 97,992 tonnes per day, broadly
    in line with targeted levels of 100,000 tonnes per day.

    - The mill facility continued to perform near name plate capacity during
    the third quarter, averaging 3,113 tonnes per day. The redundancy program
    at the mill facility is near completion and is expected to minimize
    operational downtime during periods of scheduled maintenance.

Recent News

    - On September 20, 2010, the Company reported the addition of 127,750
    gold equivalent ounces(*) in Proven and Probable Reserves at three new
    discoveries made at Ocampo. These three new deposits were discovered
    through the first phase drilling program during the first half of 2010
    and will be incorporated into the 2010 Reserves and Resources Statement
    along with additional Reserves and Resources delineated through the
    Company's ongoing drilling program at Ocampo in the second half of the
    year.

    - On October 1, 2010, the Company announced that it had entered into a
    definitive merger agreement with Capital Gold Corporation pursuant to
    which the Company is offering to acquire all of the issued and
    outstanding common shares of Capital Gold in a cash and share
    transaction. Under the terms of the agreement, each common share of
    Capital Gold will be exchanged for 0.5209 common shares of Gammon Gold
    and a cash payment in the amount of $0.79 per share. Capital Gold owns
    and operates the El Chanate gold mine located in Sonora, Mexico as well
    as the Orion development project in Nayarit, Mexico.

    - On October 4, 2010, the Company announced that the labor disruption at
    the El Cubo mine that was announced on June 17, 2010, had been declared
    illegal by the Mexican Federal Labor Board. In accordance with this
    ruling, the union is required to release the mine's assets to the
    Company. The union has launched an informal appeal of the ruling, which
    is currently under review. The Company is working towards regaining
    access to the facilities in order to assess the potential resumption of
    mining activities.

    - On October 28, 2010, the Company announced the discovery of several new
    drill targets and the launch of a drilling program at the Venus Project.

    La Boleta, Venus Project

    - 171 samples averaging 1.52 grams per tonne gold, 21 grams per tonne
      silver, or 1.90 grams per tonne gold equivalent(*) (gold values were
      capped at 8 grams per tonne).

    Santo Nino, Venus Project

    - 150 samples averaging 1.16 grams per tonne gold and 7 grams per tonne
      silver, or 1.29 grams per tonne gold equivalent(*) (gold values were
      capped at 8 grams per tonne).

    Roncesvalle, Venus Project

    - 29 samples averaging 1.28 grams per tonne gold and 17 grams per tonne
      silver, or 1.58 grams per tonne gold equivalent(*).

- The Company recently acquired a new block of three claims on the west
side of the Ocampo Mine properties that added 2,886 hectares to the Ocampo
mineral properties. A major new exploration concession of 14,669 hectares,
"Fraile Norte" was also staked in the state of San Luis Potosi to cover
potential extensions of the Santa Maria de la Paz mining district.

(*) 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

Results of Operations

(all amounts are in U.S. dollars and are in thousands, except ounces, per
share amounts, average realized prices and total cash costs)

                                       Ocampo                 El Cubo
    Three Months Ended           Sept 30/10 Sept 30/09 Sept 30/10 Sept 30/09
    Gold ounces produced             27,018     24,145          -      7,392
    Silver ounces produced        1,189,769    948,263          -    317,382
    Gold equivalent ounces           45,520     38,835          -     12,227
    produced (Realized)(1)
    Gold ounces sold                 26,167     22,219        194      7,639
    Silver ounces sold            1,188,135    925,666     14,578    323,586
    Gold equivalent ounces           44,672     36,631        427     12,674
    sold (Realized)(1)
    Total cash costs per gold          $440       $433     $1,368       $692
    equivalent ounce(2)(3)
    Total cash costs per gold        ($121)        $83     $1,568       $507
    ounce(2)
    Gold to Silver Ratio                 64         64         63         67
    Realized Gold Price              $1,230       $970     $1,247       $933
    Realized Silver Price            $19.19     $15.11     $19.91     $13.86
    Gold equivalent ounces           48,650     41,387          -     13,163
    produced (55:1)(3)
    Total cash costs per gold          $411       $406     $1,272       $649
    equivalent ounce
    (55:1)(2)(3)

    (table continued below)

                               Consolidated
    Three Months Ended           Sept 30/10 Sept 30/09
    Gold ounces produced             27,018     31,536
    Silver ounces produced        1,189,769  1,265,645
    Gold equivalent ounces           45,520     51,062
    produced (Realized)(1)
    Gold ounces sold                 26,361     29,858
    Silver ounces sold            1,202,713  1,249,252
    Gold equivalent ounces           45,099     49,305
    sold (Realized)(1)
    Total cash costs per gold          $449       $500
    equivalent ounce(2)(3)
    Total cash costs per gold        ($108)       $191
    ounce(2)
    Gold to Silver Ratio                 64         64
    Realized Gold Price              $1,230       $971
    Realized Silver Price            $19.19     $15.15
    Gold equivalent ounces           48,650     54,549
    produced (55:1)(3)
    Total cash costs per gold          $419       $469
    equivalent ounce
    (55:1)(2)(3)

    (1) Gold equivalent ounces include silver ounces produced and sold
        converted to a gold equivalent, based on the ratio of the actual
        realized sales prices of the commodities.
    (2) See the Non-GAAP Measures section on page 25 of the 2010 Third
        Quarter
        Management's Discussion and Analysis.
    (3) Gold equivalent ounces include silver ounces produced and sold
        converted to a gold equivalent, based on the Company's long-term gold
        equivalency ratio of 55:1.

(all amounts are in U.S. dollars and are in thousands, except ounces, per
share amounts, average realized prices and total cash costs)

                                       Ocampo                 El Cubo
    Nine Months Ended            Sept 30/10 Sept 30/09 Sept 30/10 Sept 30/09
    Gold ounces produced             73,836     80,536     10,844     18,945
    Silver ounces produced        3,217,584  2,913,444    536,457    786,972
    Gold equivalent ounces          123,428    123,312     19,108     30,338
    produced (Realized)(1)
    Gold ounces sold                 72,408     76,355     11,160     18,399
    Silver ounces sold            3,244,585  2,851,235    555,469    785,838
    Gold equivalent ounces          122,277    118,532     19,713     29,859
    sold (Realized)(1)
    Total cash costs per gold          $452       $430       $826       $624
    equivalent ounce(2)(3)
    Total cash costs per gold         ($52)       $151       $587       $424
    ounce(2)
    Gold to Silver Ratio                 65         64         65         68
    Realized Gold Price              $1,183       $974     $1,143       $927
    Realized Silver Price            $18.20     $15.22     $17.63     $13.66
    Gold equivalent ounces          132,338    133,507     20,596     33,254
    produced (55:1)(3)
    Total cash costs per gold          $421       $398       $766       $570
    equivalent ounce
    (55:1)(2)(3)

    (table continued below)

                               Consolidated
    Nine Months Ended            Sept 30/10 Sept 30/09
    Gold ounces produced             84,680     99,481
    Silver ounces produced        3,754,041  3,700,416
    Gold equivalent ounces          142,536    153,665
    produced (Realized)(1)
    Gold ounces sold                 83,568     94,754
    Silver ounces sold            3,800,054  3,637,073
    Gold equivalent ounces          141,990    148,391
    sold (Realized)(1)
    Total cash costs per gold          $504       $469
    equivalent ounce(2)(3)
    Total cash costs per gold           $33       $204
    ounce(2)
    Gold to Silver Ratio                 65         68
    Realized Gold Price              $1,179       $932
    Realized Silver Price            $18.12     $13.83
    Gold equivalent ounces          152,934    166,761
    produced (55:1)(3)
    Total cash costs per gold          $469       $433
    equivalent ounce
    (55:1)(2)(3)

    (1) Gold equivalent ounces include silver ounces produced and sold
        converted to a gold equivalent, based on the ratio of the actual
        realized sales prices of the commodities.
    (2) See the Non-GAAP Measures section on page 25 of the 2010 Third
        Quarter Management's Discussion and Analysis.
    (3) Gold equivalent ounces include silver ounces produced and sold
        converted to a gold equivalent, based on the Company's long-term gold
        equivalency ratio of 55:1.

The financial statements along with the Management's Discussion and
Analysis will be available on the Company's website at
www.gammongold.com or www.sedar.com.

The Company's quarterly financial results for the three and nine month
period ended September 30, 2010 will be released before the market opens on
Monday, November 8, 2010. The financial statements will be available on the
Company's website at www.gammongold.com or www.sedar.com.

A webcast and conference call will be held on Monday, November 8, 2010
starting at 10:00 am Eastern Time (11:00 am Atlantic Time). Senior management
will be on hand to discuss the results.

Third Quarter 2010 Conference Call

Conference Call Access:

- Toll Free: +1-888-231-8191

When the Operator answers please ask to be placed into the Gammon Gold
Third Quarter 2010 Results Conference Call.

Archive Call Access:

If you are unable to attend the conference call, a replay will be
available until midnight November 15, 2010 by dialing the appropriate number
below:

    - Local Toronto Participants: +1-416-849-0833  Passcode: 11284258
    - North America Toll Free: +1-800-642-1687     Passcode: 11284258

Third Quarter 2010 Webcast

Live Webcast:

The event will be broadcast live on the internet via webcast. To access
the webcast please follow the link provided below:

www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3226740

Archive Webcast:

The webcast will be archived for 90 days by following the link provided
below:

www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3226740 or via
the Company's website at www.gammongold.com.

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/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.

This press release includes certain "forward-looking statements" or
"forward-looking information". All statements, other than statements of
historical fact, included in this press release are forward-looking
statements that involve risks and uncertainties. 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 and gold equivalent production and prices, cash and 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, anticipated 2010 year-end and 2011 results, our ability to fully
fund our business model, including our capital and exploration program,
internally, anticipated 2010 year-end and 2011 interim and annual gold and
silver production and the cash and operating costs associated with the same,
the ability to achieve productivity and operational efficiencies, the ability
to achieve cash flow margin improvements, the ability to complete further
reduction in the open pit stripping ratio, the ability to develop and put
into production our exploration targets and the timing of each thereof, the
acquisition of Capital Gold (the "Acquisition") including whether the
completion of the Acquisition will ultimately occur, whether the anticipated
synergies of the proposed acquisition will occur, incorrect assessment of the
value of the properties of Capital Gold and failure to obtain the required
security holder, regulatory, third party and other approvals and the outcome
of any pending litigation related to the Acquisition. Forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by Gammon Gold, are inherently subject to
significant business, economic, competitive, political and social
uncertainties and contingencies. Important factors that could cause actual
results to differ materially from Gammon Gold's expectations include, among
others, risks related to international operations, the actual results of
current exploration activities, conclusions of economic evaluations and
changes in project parameters as plans continue to be refined, future prices
of gold and silver, known and unknown uncertainties and risks relating to
additional funding requirements, reserve and resource estimates, hedging
activities, development and operating risks, illegal miners, uninsurable
risks, competition, limited mining operations, production risks,
environmental regulation and liability, government regulation, currency
fluctuations, recent losses and write-downs, restrictions in Gammon Gold'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 as well as those factors discussed
in the section entitled "Risk Factors" in Gammon Gold's Form 40-F/A as filed
with the United States Securities and Exchange Commission. Although Gammon
Gold has attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause results
not to be as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such statements.
Forward-looking statements are not guarantees of future performance.
Accordingly, readers should not place undue reliance on forward-looking
statements.

For further information please visit the Gammon Gold website at
www.gammongold.com 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

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