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TORONTO (miningweekly.com) - Halifax, Nova Scotia-based Gammon Gold is no longer in talks to buy Capital Gold, the firm said on Tuesday.

“Discussions have terminated” regarding the proposed transaction, Gammon said in a tersely worded statement.

The two companies announced on March 12 that they had signed a letter of intent regarding Gammon's acquisition of Capital, for 0,1208 of a Gammon share for every Capital Gold share held.

The deal would have required approval by Capital Gold shareholders, the firms said at the time.

Gammon Gold, which produces precious metals from two mines in Mexico, produced 154 428 oz of gold and 5,78-million ounces of silver in 2008.

Capital Gold owns the El Chanate gold mine, also in Mexico, which started operations in July 2007.