Gammon Gold Reports Record Operating Cash Flow and Net Free Cash Flow at Ocampo During the First Quarter and Provides 2011 Guidance

TORONTO, April 11 /CNW/ --
TORONTO, April 11 /CNW/ - Gammon Gold Inc. ('Gammon') (TSX:GAM) (NYSE:GRS):  Gammon is pleased to report operating results for the first quarter of
2011. All amounts are in U.S. dollars unless otherwise indicated.

Gammon concluded the first quarter on plan, with record underground
production, record margins, record operating cashflow and record net
free cash flow. The Company begins the second quarter with El Cubo
mining and development commencing mid-April and the acquisition of
Capital Gold complete. The Company now has three 100% owned operating
mines and two advanced development projects in Mexico that will
underpin our peer-leading growth targets in 2011 and beyond.

First Quarter and Subsequent Highlights

    --  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

  o Gold production of 25,882 ounces at cash costs of negative $570 per
    ounce(1) for a record margin of $1,955 (141%) per gold ounce(1)
  o Silver production of 1,035,174 ounces at cash costs of negative
    $15.70 per ounce(2) for a record margin of $48 (149%) per silver
    ounce(2)
    --  Gold equivalent production of 44,703 ounces at cash costs of
        $429 per ounce for a record margin of $957 (69%) per gold
        equivalent ounce( )using the Company's long-term gold
        equivalency ratio of 55:1
    --  Effective April 8, 2011 the Company completed the acquisition
        of Capital Gold Corp.
    --  Underground development and mining at the El Cubo mine will
        commence in mid-April with processing of production ore
        scheduled for the third quarter

  1. Using silver revenues as a by-product cost credit.
  2. Using gold revenues as a by-product cost credit.

'Ocampo continued to perform to planned levels in the first quarter and
delivered another quarter of record margins, strong operating cash
flow, and the third consecutive quarter of positive net free cash flow.
The strong performance of Ocampo continues to be underpinned by the
exceptional performance of the underground operations, averaging 1,968
tpd during the quarter and reaching a record 2,103 tpd for the entire
month of March,' stated René Marion, President and Chief Executive
Officer. He continued, 'With El Cubo re-commissioning ahead of schedule
and the Capital Gold acquisition complete, the Company is well
positioned for growth in 2011 and beyond.'

2011 Operational Guidance

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.

 __________________________________________________________
|                        2011 Operational Guidance         |
|__________________________________________________________|
|Ocampo Mine                                               |
|__________________________________________________________|
|Gold Production (ounces)           |    107,000 to 119,000|
|___________________________________|______________________|
|Silver Production (ounces)         |4,290,000 to 4,730,000|
|___________________________________|______________________|
|Gold eq. Production (ounces)       |    185,000 to 205,000|
|___________________________________|______________________|
|Total Cash Costs per Gold eq. ounce|             $425-$455|
|___________________________________|______________________|
|El Cubo Mine                                              |
|__________________________________________________________|
|Gold Production (ounces)           |      10,000 to 15,000|
|___________________________________|______________________|
|Silver Production (ounces)         |    550,000 to 825,000|
|___________________________________|______________________|
|Gold eq. Production (ounces)       |      20,000 to 30,000|
|___________________________________|______________________|
|Total Cash Costs per Gold eq. ounce|             $700-$730|
|___________________________________|______________________|
|Consolidated (Ocampo and El Cubo)                         |
|__________________________________________________________|
|Gold Production (ounces)           |    117,000 to 134,000|
|___________________________________|______________________|
|Silver Production (ounces)         |4,840,000 to 5,555,000|
|___________________________________|______________________|
|Gold eq. Production (ounces)       |    205,000 to 235,000|
|___________________________________|______________________|
|Total Cash Costs per Gold eq. ounce|          $455 to $485|
|___________________________________|______________________|
|El Chanate Mine*                                          |
|__________________________________________________________|
|Gold Production (ounces)           |      50,000 to 55,000|
|___________________________________|______________________|
|Total Cash Costs per Gold ounce    |                  $485|
|___________________________________|______________________|
|Consolidated (Ocampo, El Cubo and El Chanate*)            |
|__________________________________________________________|
|Gold Production (ounces)           |    167,000 to 189,000|
|___________________________________|______________________|
|Silver Production (ounces)         |4,840,000 to 5,555,000|
|___________________________________|______________________|
|Gold Eq. Production (ounces)       |    255,000 to 290,000|
|___________________________________|______________________|
|Total Cash Costs per Gold Eq. Ounce|             $455-$485|
|___________________________________|______________________|

Assumes a gold equivalency ratio of 55:1


Assumes a foreign exchange rate of 12.0 Mexican pesos to one U.S. dollar


* Attributable production

2011 Analyst Day Webcast

A live webcast of the Company's Analyst Day presentations will be held
on April 11, 2011 starting at 10:00 a.m. Eastern Time. The webcast of
the presentations can be accessed through the following link: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3390640. The webcast will be archived for 365 days.

About Gammon Gold


Gammon Gold Inc. is a publicly traded mid-tier gold and silver producer
engaged in the mining, development, exploration and acquisition of
resource properties in North America. The Company owns and operates
three producing mines in Mexico, the Ocampo mine in Chihuahua State,
the El Chanate project in Sonora State, and the El Cubo mine in
Guanajuato State. Gammon Gold also owns the Guadalupe y Calvo advanced
exploration property in Chihuahua State and the Orion advanced
exploration property in the State of Nayarit, and has six exploration
properties in various states throughout Mexico. Gammon's executive
office is located in Toronto, Ontario Canada.

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, 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'', ''target'',
''continue'', ''estimate'', ''may'', and similar expressions identify
forward-looking statements. Forward-looking statements include, among
other things, statements regarding anticipated future financial and
operational performance, the future price of gold and silver, the
timing of re-commissioning and re-commencement of production at El
Cubo, the de-risking of operations, future exploration results of its
exploration and development program at Guadalupe y Calvo, the Company's
ability to delineate additional resources and reserves as a result of
such program, and the company's ability to mine such targets by
mid-2011, statements regarding 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, 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 2011 results, operating performance projections for 2011,
our ability to fully fund our business model internally, 2011 gold and
silver production and the cash and operating costs associated
therewith, the ability to achieve productivity and operational
efficiencies, 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.

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