Gammon to Record a Non-Cash Goodwill and Asset Impairment Charge Relating to El Cubo

By Gammon Gold Inc., PRNE
Thursday, August 5, 2010

TORONTO, August 6, 2010 - Gammon Gold Inc. ("Gammon") (TSX:GAM and NYSE:GRS): As previously
announced on June 17, 2008, the Company has indefinitely suspended operations
at the El Cubo mine, located in Guanajuato State, Mexico. This decision was a
result of continued labour disruptions by the unionized workforce and rising
operating costs associated with the failure of the unionized workforce to
achieve expected productivity levels.

This event was considered a triggering event for the purpose of assessing
whether the carrying value of the El Cubo mine's long-lived assets and
goodwill were impaired. As a result, the Company conducted a long-lived asset
impairment test whereby future life of mine cash flows reflecting recent
union productivity experience were determined and compared to El Cubo's
carrying value. Based on this test, the Company will record a goodwill and
asset impairment charge of US$193.3 million in the second quarter ending June
30, 2010
. The remaining carrying value of the El Cubo mine's long-lived
assets will be US$60.9 million. While the charge will reduce second quarter
reported earnings by US$193.3 million, it is a non-cash accounting adjustment
and will not affect reported cash flows, cash balance, or proven & probable

Further details will be provided in the Company's second quarter
financial statements and Management's Discussion and Analysis for the three
and sixth month period ended June 30, 2010. These financial statements will
be released before the market opens on Tuesday, August 10, 2010 and will be
available on the Company's website at or

Second Quarter 2010 Conference Call


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

Conference Call Access:

- Toll Free: 1-888-231-8191

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

Archive Call Access:

If you are unable to attend the conference call, a replay will be
available until midnight August 17, 2010 by dialing the appropriate number

- Local Toronto Participants: 1-416-849-0833 Passcode: 84971221

- North America Toll Free: 1-800-642-1687 Passcode: 84971221

Second 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:

Archive Webcast:

The webcast will be archived for 90 days by following the link provided
below: or via
the Company's website at

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
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

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
re-open 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 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: 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

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