Gammon Gold Completes Strategic Investment in Corex Gold Corporation

July 16, 2010

HALIFAX, Canada, July 16, 2010 /PRNewswire-FirstCall/ — Gammon Gold Inc.
(“Gammon”) (TSX:GAM and NYSE:GRS): Gammon is pleased to announce that it has
completed the non-brokered private placement with Corex Gold Corporation
(“Corex”) (TSXV:CGE) announced on July 8, 2010. Pursuant to the private
placement, Gammon has acquired 4,706,000 units of Corex at a subscription
price of CAD $0.68 per unit for an aggregate purchase price of CAD
$3,200,080, representing approximately 12% of the issued and outstanding
shares of Corex (approximately 14% on a fully diluted basis). Each unit
consists of one common share and one half of one share purchase warrant
exercisable at CAD $0.90 for a period of 24 months from the closing date of
the transaction.

Gammon will have the right to participate in all future financings of
Corex to maintain its proportionate shareholding. Peter Drobeck, Senior Vice
President of Exploration and Business Development for Gammon, has been chosen
to sit on the Technical Advisory Board of Corex.

Corex is a TSX Venture Exchange listed junior gold exploration company
focused on advancing the Santana Gold Project in Sonora State, Mexico.

After giving effect to the transaction, Gammon has control or direction
over 4,706,000 shares of Corex and 2,353,000 common share purchase warrants,
representing approximately 12% of the issued and outstanding shares
(approximately 14% on a fully diluted basis) of Corex. The transaction was
effected by Gammon for investment purposes.

About Gammon Gold

Gammon Gold Inc. is a mid-tier gold and silver producer with properties
in Mexico. The Company’s flagship Ocampo Project in Chihuahua State achieved
commercial production in January 2007. Gammon Gold also owns the El Cubo mine
in Guanajuato State and has the promising Guadalupe y Calvo development
property in Chihuahua State. The Company recently completed option purchase
agreements to acquire the Mezquite Project in Zacatecas State, Mexico and the
Venus Project located north of the Ocampo mine in Chihuahua State, Mexico. It
also has recently signed a Letter of Intent to acquire the Los Jarros Project
in Chihuahua State, Mexico. Since 2008, the Company has increased its land
position by over 59% and has made strategic investments in Golden Queen
Mining Co. Ltd. and Corex Gold Corporation. The Company is based in Halifax,
Nova Scotia
with an Executive Office in Toronto, Ontario.

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

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 Gammon, 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 its financial
exposure to litigation, targets, estimates and assumptions in respect of gold
and silver production and prices, cash and 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, anticipated 2009 year-end and 2010
results, operating performance projections for 2009 and 2010, our ability to
fully fund our business model, including our capital program and exploration,
internally, 2009 and 2010 gold and silver production and the cash and
operating costs associated therewith, the ability to achieve productivity and
operational efficiencies, the ability to achieve cash flow margin
improvements, further reduction in the open pit stripping ratio, the ability
to develop and put into production our exploration targets, and the timing of
each thereof. Forward-looking statements are necessarily based upon a number
of estimates and assumptions that, while considered reasonable by Gammon, are
inherently subject to significant business, economic, competitive, political
and social uncertainties and contingencies. Many factors could cause Gammon’s
actual results to differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, Gammon. 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 Gammon’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.

For further information: or a copy of the early warning report, please
visit the Gammon Gold website at http://www.gammongold.com or contact: Scott
, Chief Financial Officer, Gammon Gold Inc., +1-416-646-3825; Anne Day,
Director of Investor Relations, Gammon Gold Inc., +1-902-468-0614; Chris
, VP, Corporate Development, Gammon Gold Inc., +1-416-646-3825

SOURCE Gammon Gold Inc.

Source: newswire

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