Gammon Gold Reports Q1 Operating Cash Flown of $50M at Ocampo

Gammon Gold Inc. GRS reports operating results for the first quarter of 2011. Record operating cash flow of approximately $50 million at Ocampo Record net free cash flow of approximately $24 million at Ocampo, the third consecutive quarter of positive net free cash flow A cash position of $119 million as of March 31, 2011 Gold equivalent production of 49,853 gold equivalent ounces at cash costs of $383 per gold equivalent ounce, for a record margin of $1,002 (72%) at the gold equivalency ratio of 43:1 realized during the quarter In 2011, the Company expects to produce 117,000 to 134,000 ounces of gold and 4.84 to 5.56 million ounces of silver, or 205,000 to 230,000 gold equivalent ounces from the Ocampo and El Cubo mines assuming a gold equivalency ratio of 55:1. Total cash costs for 2011 at the two mines are expected to be $455 to $485 per gold equivalent ounce assuming a gold equivalency ratio of 55:1. Capital Gold provided guidance for fiscal year 2011 for the El Chanate mine of 65,000 to 70,000 gold ounces at total cash costs of $485 per gold ounce. Using the production attributable to Gammon from El Chanate for the balance of the year, production for 2011 is forecasted to be 255,000 to 290,000 gold equivalent ounces at a total cash costs of $455 to $485 per gold equivalent ounce assuming a gold equivalency ratio of 55:1.