Gammon Gold Announces Initial Reserves at Three new Discoveries at its Ocampo
Operation
TSX: GAM / NYSE: GRS / BSX: GL7
TORONTO, Sept. 20 /CNW/ - Gammon Gold Inc. ("Gammon" or the "Company") (TSX:GAM and NYSE:GRS) is pleased to report an initial 127,750 gold equivalent ounces(1) in Proven and Probable Reserves at three new discoveries made at Ocampo. These three new deposits have been discovered through the first phase drilling program during the first half of 2010.
Two of the new discoveries are underground deposits; Santa Eduviges (Reserves of 44,961 gold equivalent ounces(1)), currently being developed as the second underground mine at Ocampo and Belen/Santa Juliana (Reserves of 50,529 gold equivalent ounces(1)), which are new veins discovered in the main NE underground mine. The third new discovery, Las Molinas, is a new open pit deposit (Reserves of 32,260 gold equivalent ounces(1)). These Reserves will be updated during the second 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. The Company expects to issue the 2010 Reserves and Resources Statement by the end of first quarter of 2011.
"We are particularly pleased that these additional reserves were from new discoveries. These initial results highlight the potential of the Ocampo property as well as our surrounding land package," stated Rene Marion, President and CEO of Gammon. "For the remainder of 2010, we plan to complete an additional 45,000 metres of drilling at Ocampo targeting additional in-pit resources along the PGR Trend, as well as new open pit and underground targets."
Scientific or technical information in this Press Release relating to Mineral Reserves for the Ocampo property have been prepared and verified by employees of Gammon Gold Inc. under the supervision of Ramon Luna, P. Geo. Mr. Luna, is a "Qualified Person" as defined in National Instrument 43-101.
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 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.
1) Please refer to the mid-year reserve tables as at June 30, 2010 that
are attached to this press release
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 http://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 in 2010 and subsequent years, 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 2009 results, operating performance projections for 2009 and 2010, our ability to fully fund our business model internally, 2009 gold and silver production and the cash and operating costs associated therewith, the ability to achieve productivity and operational efficiencies, 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.
Ocampo Proven & Probable Reserve Additions(2)(3)(5)(6)
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Gold
Gold Equi-
Equi- valent
Gold Silver valent Gold Silver Ounces
Mineral (g/t) (g/t) (g/t) Tonnes Ounces Ounces (000's)
Category (4) (4) (4) (000's) (000's) (000's) (1)
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Los Molinas
Open Pit(7)
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Proven 0.72 21 1.06 785 18 531 27
Probable 0.52 18 0.80 214 4 122 6
Total Los
Molinas Proven
& Probable 0.68 20 1.00 999 22 653 32
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Santa Eduviges
Underground
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Proven 4.18 85 5.56 197 26 540 35
Probable 2.42 52 3.26 94 7 158 10
Total Sta.
Eduviges Proven
& Probable 3.61 75 4.82 290 34 698 45
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Santa Juliana/
Belen Underground
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Proven 2.39 254 6.47 81 6 665 17
Probable 1.91 219 5.43 192 12 1,354 34
Total Sta.
Juliana/Belen
Proven &
Probable 2.05 229 5.74 274 18 2,019 51
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Total Proven
Additions 1.49 51 2.30 1,064 51 1,736 79
Total Probable
Additions 1.41 102 3.05 500 23 1,634 49
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Total Additions
Proven &
Probable 1.46 67 2.54 1,563 74 3,370 128
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Notes to Mineral Resources and Reserves Tables:
1. Gold equivalent calculations use reserve metal prices of $945/oz for
gold and $15.20/oz for silver for a gold to silver ratio of 62.17:1
2. Reserves additions have been calculated in accordance with NI 43-101,
as required by Canadian securities regulatory authorities. Mineral
Reserves additions have been calculated as at June 30, 2010.
3. Grade represents an average, weighted by reference to tons of ore type
where several recovery processes apply.
4. The metallurgical recovery applicable for each deposit and the cut-off
grades used to determine Reserves additions as at June 30, 2010 are as
follows:
Au Ag
Metallurgical Metallurgical Cut-off
Mine Recovery (%) Recovery (%) Grade g/t
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Los Molinas Mill 96 82 (greater than)2.0
Los Molinas Pit
Fine Crush 82 72 (greater than)0.7-2.0
Los Molinas Coarse
Crush 60 35 (greater than)0.18-0.70
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Sta. Eduviges, Sta.
Juliana, Belen 96 82 2.0
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All ores at Ocampo demonstrate similar metallurgical recoveries
regardless of whether oxides are sulfides.
5. The Los Molinas Open Pit strip ratio is 5.5:1.
6. The basis for the reserve estimation is the Whittle pit optimization
methodology.
7. Sums may not add to totals due to rounding.
For further information: please visit the Gammon Gold website at www.gammongold.com or contact: Rene Marion, President & Chief Executive Officer, Gammon Gold Inc., 416-646-3825; Anne Day, Director of Investor Relations, Gammon Gold Inc., 902-468-0614
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