Gammon Reports Strong Operating Performance at the Ocampo Mine for October and November
By Gammon Gold Inc., PRNEMonday, December 6, 2010
TSX: GAM / NYSE: GRS / BSX: GL7
TORONTO, December 7, 2010 - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): is pleased to provide
preliminary results from the Ocampo mine for the months of October and
November. Operations at the Ocampo mine continue to strengthen and benefit
from the completion of the two year capital expansion program. All figures
reported are in U.S. dollars unless otherwise indicated.
The Company remains on track to achieve the 2010 Ocampo production and
cash cost guidance of 100,000-110,000 gold ounces; 4,400,000-4,950,000 silver
ounces; 180,000-200,000 gold equivalent ounces(1); and total cash costs of
US$410 - US$435 per gold equivalent(1) ounce.
Ocampo Key Performance Indicators - October and November, 2010 ------------------------------------------------------------------------- The Ocampo mine continued to report positive results during the quarter to date period including: - Production of 18,438 ounces of gold and 752,215 ounces of silver, or 32,548 gold equivalent ounces at the realized gold equivalency ratio of 53:1 (or 32,115 using the Company's long term gold equivalency ratio of 55:1) - Total cash costs per gold equivalent ounce averaged $437 using the realized gold equivalency ratio of 53:1 (or US$445 using the Company's long term gold equivalency ratio of 55:1) - Utilizing Ocampo's silver revenues as a by-product cost credit, total cash costs per gold ounce were negative US$309 per gold ounce sold - The primary North-East underground mine averaged 1,612 tonnes per day, exceeding design rates - The second underground operation, Santa Eduviges, is confirmed to commence commercial production during December 2010 - Open pit production averaged more than 103,956 tonnes per day, exceeding the targeted design rates - The mill facility reported 3,121 tonnes per day - Mill recoveries improved to 97% for gold and 81% for silver as a result of the commissioning of the mill cyclones, thickeners and leach tank - Stacking at the heap leach facility averaged over 10,394 tonnes per day
"I am very pleased that the Ocampo team continues to deliver improvements
across the key operating metrics. The operations are now benefiting from the
two year capital expansion program that is not only supporting continued
production growth, but at costs lower than the industry average, all of which
is during a period of record metal prices." said René Marion, President and
Chief Executive Officer. "Margins of US$933 per gold equivalent ounce, or
68%, combined with our very strong cash position of over US$107 million as of
September 30th, positions Gammon well to self fund its future growth
profile."
Recent Operational Highlights ------------------------------------------------------------------------- - Development of the Santa Eduviges underground mine continues to benefit from having access to the additional workforce redeployed from the Company's El Cubo mine. More than 1,700 metres of development has been completed at Santa Eduviges to date with stoping anticipated to begin in late December - The ongoing exploration program at Santa Eduviges has reported continued positive results. To date, the program has added new ounces to Reserves and increased the number of delineated veins from one to six. - Accelerated development of new reserve and resource discoveries in the northeast underground mine also continued, with considerable progress being made at the Belen, Santa Juliana and San Amado veins - The redundancy program at the Ocampo mill facility is largely complete with the commissioning of the fourth filter press scheduled at the end of December - The Preliminary Economic Assessment of the Guadalupe y Calvo development property is expected to be released in approximately 4-6 weeks - The Company is currently updating its annual Reserves and Resources and expects to release the results in February, 2011 Ocampo Key Performance Metrics ------------------------------------------------------------------------- ------------------------------------------------------------------------- Underground Q1 2010 Q2 2010 Q3 2010 Oct/NovTD(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Average tpd 1,377 1,500 1,596 1,612 ------------------------------------------------------------------------- Head grade Aue (g/t)(1) 5.23 4.73 4.45 4.85 ------------------------------------------------------------------------- Avg. monthly development 1,301 1,581 2,182 2,357 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Open Pits Q1 2010 Q2 2010 Q3 2010 Oct/NovTD(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Average tpd 93,730 103,117 97,992 103,956 ------------------------------------------------------------------------- Head grade Aue(g/t)(1) 0.97 1.01 1.46 1.09 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Mill Facility Q1 2010 Q2 2010 Q3 2010 Oct/NovTD(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Average tpd 2,920 3,182 3,113 3,121 ------------------------------------------------------------------------- Mill grade Aue(g/t)(1) 3.53 3.50 3.87 3.87 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Heap Leach Facility Q1 2010 Q2 2010 Q3 2010 Oct/NovTD(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Average tpd 7,328 10,017 6,830 10,394 ------------------------------------------------------------------------- Head grade Aue (g/t)(1) 0.72 0.81 0.94 0.85 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Production Q1 2010 Q2 2010 Q3 2010 Oct/NovTD(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gold Ounces Produced 21,855 24,963 27,018 18,438 ------------------------------------------------------------------------- Silver Ounces Produced 960,817 1,066,998 1,189,769 752,215 ------------------------------------------------------------------------- Gold eq.(1) Ounces Produced 39,325 44,363 48,650 32,115 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total Cash Costs Q1 2010 Q2 2010 Q3 2010 Oct/NovTD(2) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total cash costs per gold eq. ounce (Realized) $458 $461 $440 $437 ------------------------------------------------------------------------- Total cash costs per gold eq. ounce (55:1) $423 $430 $411 $445 ------------------------------------------------------------------------- Total cash costs per gold ounce $8 ($33) ($121) ($309) -------------------------------------------------------------------------
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,
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 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
future growth internally, our ability to expedite the development of the
Santa Eduviges underground, the continued positive results from our
exploration programs, our ability to complete the Preliminary Economic
Assessment of Guadalupe y Calvo in 4-6 weeks, 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.
(1) Using the Company's long term gold equivalency ratio of 55:1
(2) Data from October to November are estimates only and are subject to
final adjustments
For further information: For further information: please visit the Gammon
Gold website at www.gammongold.com or contact: René Marion, 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 visit the Gammon Gold website at www.gammongold.com or contact: René Marion, Chief Executive Officer, Gammon Gold Inc., +1-416-646-3825; Anne Day, Director of Investor Relations, Gammon Gold Inc., +1-902-468-0614
Tags: canada, December 7, Gammon Gold Inc., Toronto