Gammon Gold Turnaround Exceeds Expectations

By Canadian Press
14 Jul 2008 at 02:27 PM GMT-04:00

TORONTO (CP) -- Gammon Gold Inc. [TSX:GAM] said Monday its second-quarter production was its highest ever at 71,154 gold equivalent ounces, up 48 per cent from the fourth quarter of 2007 when the company launched a turnaround strategy.

The three months ended June 30 resulted in production of 43,465 ounces of gold and 1.45 million ounces of silver at a cash cost of $506 per gold equivalent ounce.

Production was up by half from a year earlier while costs were reduced by 34 per cent.

''The turnaround strategy launched in December 2007 had an initial focus on improving productivity and that strategy has had an obvious and positive impact on production that has exceeded even our internal targets to date,'' stated CEO Rene Marion.

Gammon, which operates the Ocampo mine in Mexico's Chihuahua state and El Cubo in Guanajuato state and is developing the Guadalupe y Calvo property in Chihuahua, said second-quarter net free cash flow was $3.8 million.

© The Canadian Press 2008