9/10/2009

Gammon Gold Presentation
Denver Gold Forum September 2009

1

Forward Looking Statements
Forward Looking Statements
This presentations includes certain “forward-looking statements”. All statements other than statements of historical fact, included in this
presentation, are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, among other things,
statements regarding 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 the development of new deposits, costs and timing of construction, costs and timing
of future exploration and reclamations expenses.. There can be no assurance that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ
materially from Gammon Gold’s expectations include, among others, risks related to international operations, the actual results of current
exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future
prices of gold and silver, as well as those factors discussed in the section entitled “Risk Factors” in Gammon Gold’s Form 40-F as filed with the
United States Securities and Exchange Commission. Although Gammon Gold has attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources
This presentation uses the terms “Measured”, “Indicated” and “Inferred” Resources. U.S. investors are advised that while such terms are
recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. “Inferred Resources” have a
great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an
inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of
feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever
be converted into reserves. U.S. investors are also cautioned not to assume that all or any part of an Inferred mineral Resource exists, or is
economically or legally mineable.

2

1

9/10/2009

Gammon Properties in Mexico
Ocampo (11,262 Ha)
• World Class Mining District
• Historical Production of:
• 3.5M ounces Gold / 50M ounces Silver
• One of the largest gold mines in Mexico

El Cubo (14,087 Ha)
Guadalupe y Calvo (66,883+ Ha)
•Exploration Property
•Historic Production of:
• 2M ounces Gold / 28M ounces Silver
•Historic grades: 37 g/t Gold / 870 g/t Silver

•World Class Mining District
•Over 400 years of Production
•Historical Production of:
•5M ounces Gold / 1.2B ounces Silver

Total Land Package: 92,200+ Ha
3

2008 – Focus on Productivity & Cash Flow
2008: A Turnaround Year for Gammon
Record Operating Performance
Production
2008
2007 % Change
12%
Gold (oz)
154,428 121,387
Silver (oz)
5,778,874 5,035,704 15%
15%
Gold Eq. (oz)
251,510 218,734
13%
Gold Eq. Ratio
59:1
52:1
Cash Costs
2008
2007 % Change
Cash Costs (per Gold eq oz)
$528
$670
(21%)
Cash Costs (per Gold oz)
$313
$649
(52%)
Long Term Gold Eq. (55:1)
2008
2007 % Change
Gold Eq. (oz)
259,498 212,945
22%
Cash Costs (per Gold Eq. oz)
$512
$688
(26%)
Average Price
2008
2007 % Change
Gold ($/oz)
$864
$699
24%
Silver ($/oz)
$14.66
$13.42
9%
2008
2007 % Change
EBITDA ($M)
$53.9
($18.2)
396%
Earnings per Share
$0.34
($0.90)
138%
Operating Cash Flow ($M)
$55.9
($34.2)
263%

2008 Strategic Achievements
Corporate:
 Renegotiated credit facility during credit crisis
 Margins improved from $29/oz to $336/oz
 Listed on NYSE, October 2008
 Presidential Decree for Ocampo land package
received
Ocampo:
 Increased productivity
 Improved working capital position
 Reduced cost structure
 Improved drilling densities by 150% (25 x 40m)
on reserves in open pits
 Delineated high grade zones supporting
optimal mill capacity
 Launched expansionary program
El Cubo:
 Consolidated operations to Las Torres Mill
 Increased insitu mining by 55%
 Reduced workforce by 29%
Guadalupe y Calvo:
 Resumed exploration program
 Started engineering

4

2

9/10/2009

H1 09 - Capital Expansion at Ocampo
H1 2009: Focus on Completing Expansion Program at Ocampo
H1 2009 Priorities & Achievements
 Ocampo Strategic Mill Expansion Program
 Phase I – 2,400-2,600 tpd (Nov/08)
 Phase II – 2,600-2,800 tpd (Mar/09)
 Phase III – 3,300-3,400 tpd (Q3, 2009)
 Mill capacity increased by 165% for $4.7M investment
 Aggressive cost management philosophy
 Improved cost profile
 Costs of $454 per AuEq ounce ($210 per gold ounce)
32% improvement over 2007
 Heap Leach upgrade to more efficient conveyor stacking
system (Q3 2009)
 Engineering completed to Increase heap leach stacking
capacity by 10MT to 14MT
 CFE power access completed (Jul 15/09) and all areas of
Ocampo are currently accessing grid power
 Underground development ahead of plan
 Launched aggressive 123,000m exploration program

5

H2 2009 Ocampo Strategic Objectives
Leveraging Growth Potential at Ocampo
120,000

2009 Daily Avg. Open Pit Tonnes per Day

40,000

Jan

800

Feb

Mar

Apr

May

Jun

Jul

Aug

100,000

97,061

93,507

89,051

81,171

87,315

60,000

71,080

80,000

93,252

100,000

66,086

 Ramp up underground mine to 1,000 tpd
by Q4 2009 and 1,500 tpd in Q1 2010
 Leverage increased mill and heap leach
processing capacity
 Deliver cost benefit from 20MW CFE grid
power
 Complete 123,000 metre exploration
program
 Complete Picacho Open Pit pre-strip for
Q4 ore access
 Continued cost reduction initiatives
 Re-negotiate contracts
 Reduce on-site contractors

SepMTD
(as of Sept
8/09)

2009 Daily Avg. Underground Tonnes per Day
800

700
600
500

552

535

577

422

400
300
200
Q1 2009

Q2 2009

Jul-09

Aug-09

SepMTD
(as of Sept 8/09)

6

3

9/10/2009

Ocampo Underground
 Average 800 tpd during September (as of Sept. 8)
 8 longhole stopes producing or being drilled
 9,867 metres of lateral development to date
 Over 2,900m of air and water pipes replaced
 33 headings ready for jumbo development and a
further 17 for jackleg headings
 Crews for 3 longhole drill rigs fully manned
 Two more longhole drills to arrive Sept 2009
 A drilled inventory of 16,821 tonnes ready to blast
 Over 256,000 tonnes in prep or production stage
 Specialized blasting crews being trained
 100 new miners recruited

7

Ocampo Open Pits
 Refugio phase 1 is in
End of July´09 surface and designed pits
ore production
 More than 80% of
ore is mined from
Estrella
Refugio phase 3
Phase 1
Picacho phase 1
PDG
Conico
 Plaza de Gallos will
connect Refugio and
Picacho
 reduces distance to
crusher by the end
N
Picacho phase 3
of 2009
 Picacho Phase 1 and 2
 Phase 1 is currently pre-stripping waste(final pit)
 Phase 2 will access the VHG area with a switchback connection
 Pits not been mined in 2009
 Conico – Estrella - Refugio Phase 3 (final pit) - Picacho Phase 3 (final pit)
8

4

9/10/2009

Ocampo Heap Leach Conveyor System
 Modified to valley leach design
 Replaces 12 grasshopper
conveyors

New
Overland

 Allows extra 10 million tons on
virtually same footprint
 Estimated Capex cost $US1.5M
or $0.11/tonne
 Enables heap extension both in
height and to the west
 Removes all semi permanent
structures from the stacked face
 Allows resumption of 10-12,000
tpd stacking rate, started
ramping up production in
Aug/09

9

Ocampo Phase III Mill Expansion to
3,300 – 3,400tpd
 Commissioning in Q3
 Knelson Concentrator
installed
 Third filter press being
installed
 Total cost to increase
capacity from 1,200
tpd in 2007 to 3,3003,400 tpd for $4.7M

10

5

9/10/2009

El Cubo Strategic Objectives
El Cubo Productivity Enhancements
 Reduced workforce by over 29% in 2008
 Consolidated operations to Las Torres
facility
 Peñoles Las Torres Negotiations complete
 Extends lease for 5 years
 Allows accelerated development of
Guadalupe y Calvo by having access
to 2 processing facilities currently on
care & maintenance
 Leverage 7-day continuous work schedule
 Further optimization of workforce
 Launched exploration drilling on new
targets
 Aggressive cost containment strategy

11

2009 Exploration Update
The 2008-2009 Exploration
program was the first program
undertaken in several years

Ocampo
• Completed 81.5+km drilling on four exploration targets (Aug/09)
• Four grassroots targets:
• Altagracia, Belen, Picacho SE and Las Molinas
• Las Molinas numerous positive drill intercepts
• First surface drill intercept on San Amado at UG cut-off grade
• Drainage geochem discovered high-amplitude Au anomaly in
NW part of property
Chihuahua State

Guadalupe y Calvo
• Fieldwork in NW part San Luis Concession
discovered stockwork veining
Guanajuato State

El Cubo
• Q3 – Q4 program designed and AFE approved
• Drilling initiated at Dolores SE

MEXICO CITY

12

6

9/10/2009

2009 Ocampo Exploration Program
 Mapped entire Ocampo land package
 14 new drill targets identified
 Major anomaly identified in NW
Priority New Discovery Drilling Targets
 Las Molinos – Altagracia - Picacho SE San Amado - Santa Librada

Surface-Mapped
Veins remaining
to be drill-tested

1611 Level Existing
Workings

2009 NE Veins Drill
Program
First Priority
Las Molinas
San Amado
Belem
Second Priority
Los Monos,
Rosario,
Aventurero

123,000 metre drilling program
 conversion of pit inferred resources to
reserves
 new grass root open pit targeting
 conversion of down-dip and on strike
underground resources to reserves
 new grass root underground veins targeting
(10 new veins over 6 kms identified)
 81.5km (66%) completed to date

13

2009 El Cubo Exploration Program
 Compiled old drill data to identify potential targets
1 – San Nicolas Bulk Minable
1a- Villalpando Gap
2 – Villalpando-Cebolletas
3 – Cabrestantes
4 – Villalpando –Salto
5 – Villalpando -Capulin
6 – La Loca Northwest
7 –Loca Angigua
8 – Mesa Los Galgos

9 – El Cubo Fault South
10 – Dolores Vein South
11 – Puertocito
12 – La Reyna
13 – Las Torres Bulk Mineable
14 – El Cubo North
15 – Almacen
16 – Fenix Bulk Mineable

 16 targets identified over a strike length of
15,700m
 Extensions of known productive veins and new
veins that show major alteration features
 Visible evidence of mineralization at surface
quartz veins, clay alteration, pyrite
 Favorable host rocks at depth in the ore horizon –
La Bufa & Guanajuato conglomerate
 Anomalous geochemical values for Au (>20 ppb)
and Ag (>0.1 ppm) at surface
 Completed detailed geological mapping
 Launched a 2-year, 40,000m drill program in mid2009; 6,200m targeted for 2009.
 Completed 364 metres in 2 holes (Aug 31/09)
 Initial drilling focused on Dolores, San Alberto, La
Loca and Fenix
 Drill sites for Cabresantes and Deep Veta Madre
areas
14

7

9/10/2009

El Cubo - Villalpando Vein Targets

15

Guadalupe y Calvo
 66,883 Ha gold-silver exploration project
 New claims staked to the northwest
 Drainage geochem and fieldwork identified
200m wide anomalous mineralization in NW
portion of San Luis claim
New Claim Area

Gammon Property
(San Luis NW
Portion)

New
Stockwork
zone 200 m
wide

NW Portion Potential
Mineralization area

16

8

9/10/2009

GyC Sampling Results

muestra
GRO-131
GRO-132
GRO-133
GRO-134
GRO-135
GRO-136
GRO-137
GRO-138
GRO-139
GRO-140
GRO-141
GRO-142
GRO-143
GRO-144
GRO-145
GRO-146
GRO-147
GRO-148
GRO-149
GRO-150
GRO-151
GRO-152
GRO-153
GRO-154
GRO-155
GRO-156
GRO-157
GRO-158
GRO-159
GRO-160
GRO-161
GRO-162
GRO-163
GRO-164
GRO-165
GRO-166
GRO-167

MUESTREO EN ESQ NW LOTE SAN LUIS
Au
Ag
Au eq
Width_m
0.02
1
0.03
2.0
0.02
0
0.02
2.0
0.02
0
0.02
2.0
0.02
0
0.02
2.0
14.50
100
16.32
2.0
0.02
1
0.03
2.0
0.21
3
0.26
2.0
0.85
5
0.94
2.0
0.09
1
0.11
2.0
0.02
0
0.02
2.0
0.02
0
0.02
2.0
1.12
2
1.16
2.0
0.41
2
0.44
2.0
0.26
2
0.29
2.0
0.02
1
0.03
2.0
0.01
1
0.02
2.0
0.02
1
0.04
2.0
0.17
2
0.21
2.0
0.09
1
0.11
2.0
0.10
3
0.15
2.0
0.02
0
0.02
2.0
0.12
1
0.15
2.0
0.02
1
0.04
2.0
0.11
3
0.15
2.0
0.03
1
0.04
2.0
0.07
1
0.09
2.0
0.12
5
0.21
2.0
0.05
2
0.09
2.0
0.04
1
0.06
2.0
0.09
1
0.11
2.0
0.08
2
0.12
2.0
0.17
6
0.27
2.0
0.08
4
0.15
2.0
0.16
4
0.23
2.0
0.30
30
0.84
2.0
0.31
5
0.40
2.0
17
0.09
1
0.12
2.0

Strong Cash Management
Capital Programs Fully Funded
6-Quarters - Q1 2008 to Q2 2009

140,000

23,800

(USD 000's)

120,000
100,000

7,726

101,963

88,679

80,000
60,000
40,000

21,951

20,000
-

3,709
Opening Cash

OCF

Option Proceeds

Lease/Debt

Capex/Exploration

Closing Cash

 $100M in capital expenditures over 6 quarters has been internally funded
 Capital investment programs have positioned Ocampo for significant growth
 Majority of capital programs have been completed
 Reduced Capex requirements in 2010 and beyond
 Phase 3 heap leach expansion deferred until 2011
 Net debt free by year end
 Have not diluted shareholders with equity issue
 Cash Position of $22M (Q2 2009)
18

9

9/10/2009

Long Term Objectives

US$/oz

Annual Production

Grow margins and cash flows:
 Production rising, costs declining
 Increasing cash margins
 Growth in cash flow per share
Business Case for Gammon
 Low geopolitical risks – NAFTA
 No gold hedging
 No base metal byproduct credits
 Leveraged to gold price & more significantly to silver
2010 Forecast (Au/Ag 55:1)
 355-385k Aue oz @$315-$350/Aue oz
 200-220k Au oz @ $45-$111/Au oz (Ag credit)
 8.5-9.3M Ag oz @ $(6.61)-($5.40) Ag/oz (Au credit)
 Margins continuing to increase over 2007
Growth
 Current 3 year guidance from operations only
 Development of advanced exploration assets
 Deliver disciplined growth

Gold & Gold Eq. Production & Cash Costs
450,000
$800

400,000

$700

350,000

$600

300,000

$500

250,000
200,000

$400

150,000

$300

100,000

$200

50,000

$100

-

$-

2007

2008

Aue (55:1)

2009
Au

2010

$/Aue oz

2011
$/Au oz

Operating Margins Expanding
$1,000

$864

$900
$800

$900

$900

$900

$550

$560

2010

2011

$699

$700
$600

$470

$500

$341

$400
$300
$200
$100

$29

$-

2007

2008

Margin/ Aue oz (55:1)

2009

Gold Price

19

Appendix

20

10

9/10/2009

Ocampo Mine Overview
Ocampo – The flagship asset

Operations

Production

Near-term
Upside

 Open pit and underground operation
 Open pit - operating at 100,000 tpd (ore &
waste) (MTD as of Sept 8/09)
 Underground- operating at 800 tpd (MTD as
of Sept 8/09)
 expanding to 1,500tpd in Q1 2010
 Mill capacity expanded to 3,300-3,400 tpd
currently commissioning in Q309
 Production growth
 Cost savings
 Declining cash costs, increasing EBITDA
 Picacho in production by Q4/09
 123,000 metre drilling program
 81.5 km drilled by Aug /09
 Full access to lower cost 20MW grid power
 Other cost saving opportunities

Operating Strip Ratio

10
Operating Strip Ratio

Overview

 100% interest in the Ocampo Au/Ag project,
located in the state of Chihuahua, Mexico
 Comprises 61 exploitation concessions
covering 12,504 hectares

8
6
4
2
0
Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 2009E 2010E 2011E
Operating Strip Ratio

Ocampo Mill Expansion

3,500
3,000

3,239TPD as
of Sept 8/09

Phase III commissioned Q3/09
Capacity: 3,300 to 3,400 tpd

2,500
2,000
1,500
1,000
21

Ocampo Mine Developments
Improvement Initiatives

Open Pit
Optimization

Processing
Expansion

Cost
Reduction
Program

 Independent Open Pit Phasing Study
 As a result of the phasing study:
 strip ratio has been reduced to <3:1
 identified additional high-grade open pit
material to feed to mill
 Phase I expansion commissioned in Nov/08
 capacity increased to 2,400-2,600 tpd
 Phase II expansion commissioned in March
 capacity increased to 2,800-3,000 tpd
 Phase III expansion commissioning in Q3/09
 Capacity increased to 3,300 to 3,400 tpd
 Heap Leach upgraded to conveyor stacking
 Engineering identified additional 10MT
stacking capacity at heap leach.
 Defers phase 3 heap leach expansion to
2011
 Resumption of 10-12,000 tpd stacking rate
 Optimizing reagent and cyanide consumption
 Connected to grid to provide 100% of power
requirement (July 15, 2009)
 Other Cost reduction initiatives well
underway

Attributable Reserves and Resources

Proven
Probable
P&P

Tonnes
000's
29,766
26,892
56,658

Au Grade Ag Grade
g/t
g/t
0.82
36
0.66
25
0.74
31

Contained Au
000's oz
788
568
1,356

Contained Ag
000's oz
34,656
21,929
56,585

Measured
Indicated
M&I

12,568
15,586
28,154

0.27
0.25
0.26

13
9
11

109
127
236

5,120
4,494
9,614

Inferred

33,307

1.26

56

1,349

60,443

Total *

118,119

0.77

33

2,941

126,642

* Not NI 43-101 compliant

 Reserve/resource update
 Drilling/underground work aimed at upgrading the
substantial inferred resource to p&p and adding
resources

22

11

9/10/2009

Ocampo Underground Mine
Production Status

23

Ocampo Underground Production Status
The current status in underground mine production and is divided into five
stages:




Stopes drilled but not blasted
Stopes that are currently drilling
Stopes available to drill
Stopes in preparation
Stopes requiring development

24

12

9/10/2009

Ocampo Stopes Drilled But Not Blasted
STOPE

ELEV.

TON.

WIDTH

JESÚS
MARÍA
B-146

1655

3,881

1.6

GRADE
AU

AG

EQ

2.83

146

4.91

25

Ocampo Stopes Drilled But Not Blasted
GRADE
STOPE
SAN JUAN
B-105

ELEV.

1520 - 1536

TON.

8,000

WIDTH

1.2

AU

AG

EQ

3.9

225

7.11

26

13

9/10/2009

Ocampo Stopes Drilled But Not Blasted
STOPE

ELEV.

TON.

WIDTH

AVENTURERO
B-2

1611

5,000

1.7

GRADE
AU

AG

EQ

3.1

152

5.27

27

Ocampo Summary
Stopes Drilled But Not Blasted

TOTAL

TON.

WIDTH

16,881

1.5

GRADE
AU

AG

EQ

3.27

174

5.76

28

14

9/10/2009

Ocampo Stopes Currently Drilling
GRADE
STOPE

ELEV.

TON.

WIDTH

SAN JUAN
B-105

1500-1520

6,775

1.20

AU

AG

EQ

3.90

225

7.11

29

Ocampo Stopes Currently Drilling
GRADE
STOPE

ELEV.

TON.

WIDTH

SAN JUAN
B-105

1520-1536

15,207

1.20

AU

AG

EQ

3.70

310

8.13

30

15

9/10/2009

Ocampo Stopes Currently Drilling
GRADE
STOPE

ELEV.

TON.

WIDTH

SAN JOSÉ
B-105

1500 – 1520

1,980

SAN JOSÉ
B-105

1520 – 1536

2,094

AU

AG

EQ

1.40

3.06

270

6.92

1.40

3.06

270

6.92

31

Ocampo Stopes Currently Drilling
STOPE

ELEV.

TON.

WIDTH

JESÚS MARÍA
B-146

1620

12,255

1.50

GRADE
AU

AG

EQ

2.83

146

5.14

32

16

9/10/2009

Ocampo Summary
Currently Drilling Stopes
GRADE
TON.

TOTAL

38,311

WIDTH

1.34

AU

AG

EQ

3.31

244

6.84

33

Ocampo Stopes Available to Drill
STOPE

ELEV.

TON.

WIDTH

AVENTURERO
B-603

1467 - 1486

1,593

AVENTURERO
B-603

1486 - 1500

AVENTURERO
B-603

1500 - 1520

GRADE
AU

AG

EQ

1.20

2.51

98

3.91

1,904

1.20

2.51

98

3.91

5,600

1.20

2.51

98

3.91

34

17

9/10/2009

Ocampo Stopes Available to Drill
STOPE

ELEV.

TON.

WIDTH

AVENTURERO
B-21

1680 - 1712

12,250

1.7

GRADE
AU

AG

EQ

3.1

152

5.27

35

Ocampo Summary
Stopes Available to Drill
TOTAL

TON.

WIDTH

31,347

1.32

GRADE
AU

AG

EQ

2.65

111.5

4.25

36

18

9/10/2009

Ocampo Stopes in Preparation
STOPE

ELEV.

TON.

WIDTH

SAN JUAN

1586 - 1547

10,000

SAN JOSÉ

1586 - 1547

11,700

GRADE
AU

AG

EQ

1.4

2.8

225

6.01

1.5

3.01

320

7.58

37

Ocampo Stopes in Preparation
STOPE

ELEV.

TON.

WIDTH

SAN JOSÉ
B-24.5

1611

4,200

1.6

GRADE
AU

AG

EQ

2.92

193

5.68

38

19

9/10/2009

Ocampo Stopes in Preparation
STOPE

ELEV.

TON.

WIDTH

LA MORE B-114

1640 - 1755

9,948

1.2

GRADE
AU

AG

EQ

4.08

294

8.28

39

Ocampo Stopes in Preparation
STOPE

ELEV.

TON.

WIDTH

AVENTURERO
B-118

1656

5,500

1.3

GRADE
AU

AG

EQ

3.1

152

5.27

40

20

9/10/2009

Ocampo Stopes in Preparation
STOPE

ELEV.

TON.

WIDTH

SAN JOSÉ B-9

1675

5,000

1.8

GRADE
AU

AG

EQ

1.9

128

3.73

41

Ocampo Stopes in Preparation
STOPE

ELEV.

TON.

WIDTH

LA ESPERANZA

1689 - 1712

10,000

1.1

GRADE
AU

AG

EQ

4.43

197

7.17

42

21

9/10/2009

Ocampo Summary
Stopes in Preparation
TOTAL

TON.

WIDTH

56,348

1.41

GRADE
AU

AG

EQ

3.18

215

6.25

43

Ocampo Stope Areas Requiring Further
Development
STOPE

ELEV.

TON.

MARIA NE

1611

MARIA SW
MARIA SW

GRADE
AU

AG

EQ

9,316

3.28

195

5.72

1611

11,070

3.28

203

5.82

1675

5,773

5.76

267

9.1

MARIA NE y SW in the level 1611
planned to stop, will finish
exploration; planned on stand by,
until early 2010.
MARIA SW 1675, is planned as a
shrink stope. Mid-September start
the preparation; October, planned
90 meters of stope prep advance per
month.
Total 248m development required
44

22

9/10/2009

Ocampo Stope Areas Requiring Further
Development
STOPE

ELEV.

TON.

SAN AMADO B-133

1640

3,484

ALEHIRA B-134

1640

ROSARIO B-140

1640

GRADE
AU

AG

EQ

3.24

168

5.49

4,749

3.1

173

5.4

11,025

3.87

165

6.07

 San Amado, Alehira y
Rosario will be minined
using cut and fill.
 Area requires rehabilitation,
planned mid-September.
 October start the
development of the main
access, at a rate of 90 meters
per month
 Total 200m development
required
45

Ocampo Stope Areas Requiring Further
Development
STOPE

ELEV.

TON.

SAN FERNANDO B-133

1611

9,560

GRADE
AU

AG

EQ

5.75

413

11.25

 Access Ramp in preparation for
LH stope.
 In early September start
rehabilitation(draining the site ,
rehabilitation, and mine an
orepass)
 October mining ramp at a rate of
90 meters per month.
 Access to 1547 level.
 Total 120m development
required

46

23

9/10/2009

Ocampo Summary
Stope Areas Requiring Further Development
TON.

TOTAL

54,977

GRADE
AU

AG

EQ

4.04

226

7

47

Ocampo Stope Grade Summary

The Tonnage was not taken from official reserves

48

24

9/10/2009

Ocampo 2009 Exploration

49

Ocampo 2009 Exploration Completed






Completed 1 : 5000 District Geology
Completed District Drainage Geochem
Completed > 3,500-sample rock-chip geochem
Defined 14 new drill targets with over 5km total strike
Discovered major drainage geochem anomaly in NW
Drilled 7504m Q1 - Q2 on new discovery drilling at Altagracia, Picacho SE, Las
Molinas, Belen
Discovered highly anomalous mineralization Altagracia, Las Molinas

50

25

9/10/2009

Ocampo Present Litho-Geochem
Exploration
Work In Progress

Cerro
Colorado

Target Areas
Santa Librada (potential parallel

La Olvidada-Rosita

area to the PGR trend)

Cerro Colorado (evidence to High
Sulfidation target)

OP Area

La Olvidada - Rosita (potential
extension of UG veins)
Santa Librada

51

Ocampo Santa Librada Geochem Sampling

Santa Librada
 Multi Element anomaly in rock-chip
surface samples
 700m-long anomaly assoc. with
shearing & qtz-pyrite veining within
adularized rhyolite

52

26

9/10/2009

Ocampo Las Molinas Target
Las Molinas Target
 North of Ocampo Mill
 Series of veins in
triangular intersection
 Exploration target is
>300m long and 20 to 40m
wide
 Comleted 14 holes for
2,731mts to Aug 1/2009

Russell Tremayne, Rene Marion, & Ramon Luna show outcrop of
a 1.2m vein that carries 118.93 gpt Au + 975.7 gpt Ag

53

Ocampo Las Molinas Geology Map

54

27

9/10/2009

Ocampo Molinas Drill Sections

12m .26AuEq55

55

Ocampo Molinas Drill Sections

5m 1.76AuEq55
13m 1.16AuEq55

56

28

9/10/2009

Ocampo Molinas Drill Sections

12m 1.0AuEq55

65m 1.8AuEq55

57

Ocampo Molinas Drill Sections

11 m 2.7AuEq55

8 m 1.64AuEq55

9 m 1.2AuEq55

58

29

9/10/2009

Ocampo Molinas Drill Sections

3m 1.5AuEq55

59

Ocampo Altagracia-Picacho Drill Target

60

30

9/10/2009

Ocampo Altagracia-Picacho
Geological Section

61

Ocampo Altagracia-Picacho
Geological Section

62

31

9/10/2009

Ocampo Altagracia-Picacho
Geological Section

63

Ocampo San Amado Drill Target

64

32

9/10/2009

Ocampo San Amado Cross Section

2005 drilling
1.0m; 14.0 gpt AuEq55

2008 drilling
2.3 m; 98 gpt AuEq55

65

Ocampo San Amado Cross Section
Results Pending

66

33

9/10/2009

Ocampo San Amado Long Section

OCAMPO BEX EXPLORATION
RESULTS 2005 - 2008
Hole

True_W

AuEq(55)

1.0

14

OU-426

2.3

98.03

OU-428

6.0

56.60

+100m

OG-178

New Today OG-758
0.9m 5.50 Au, 249 Ag

+300m

67

Ocampo Exploration Summary




District Geology completed and indicates UG potential to NE, E, SE
Las Molinas discovery appears to have potential for small OP, being modeled now
Altagracia discovery has discontinuous, locally high-grade mineralization- being
worked up in detail
San Amado drilling began in July, first result positive
Large unexplained stream-sediment in Co. Colorado zone

68

34

9/10/2009

Remaining 2009 Ocampo Exploration





Complete San Amado initial discovery drilling
Complete detailed mapping Altagracia & mineralization model in 3D
Integrate surface mapping with UG vein geology from Mine Geology
Department
Drill Sta. Librada Q4
Remaining new targets to be drilled 2010
Map district alteration systematically

69

El Cubo Mine Overview
Project Overview
 Gammon holds a 100% interest in the El Cubo mine
in Guanajuato, Mexico
Overview
 Located about 275 km north-west of Mexico City
 58 concessions covering 14,087 hectares
 Underground mine with both shaft and decline
Operations  Operated with Las Torres mill (2,200 tpd)
 2008 and 2007 production exceeded 60k oz Au Eq
 Guanajuato District consists of three, multi-vein
systems trending north-west
Geology
 Only 40 veins included in the reserve/resource
model - Vein width averages about 1.9 m
 Gravity circuit increased recoveries to 90%
 Cost cutting measures in place include:
Recent
 Dedicated haulage level and single shaft to mill
Developments
 Restructuring of work force ongoing
Attributable Reserves and Resources
Proven
Probable
P&P
Measured
Indicated
M&I
Inferred
Total *

Tonnes (000’s)
1,453
1,780
3,233
160
2,315
2,475
2,781
8,489

Au Grade (g/t) Ag Grade (g/t)
3.22
188
3.29
158
3.26
172
2.38
94
2.71
53
2.69
56
4.79
215
3.59
152

Cont. Au (000’s oz) Cont. Ag (000’s oz)
151
8,801
188
9,036
339
17,837
12
484
202
3,967
214
4,451
428
19,231
981
41,519
* Not NI 43-101 compliant

70

35

9/10/2009

El Cubo 2009 Exploration

71

El Cubo Sierra Vein System
Schematic Cross-Section
 Veins most productive in
Guanajuato Conglomerate & Bufa
Rhyolite

2500 m

 Calderones Fm not favorable due
to poorly lithified character
 Deposits in Mesozoic Basement
tend to have difficult wallrock
conditions
 Best remaining exploration targets
are weak showings in Calderones
or Cedros Formations with
objective in Bufa / Guanajuato
Formations

2300 m

2100 m

1900 m
72

36

9/10/2009

El Cubo Exploration
Targets
Targets
Total Targets:
1 – San Nicolas Bulk Minable
1a- Villalpando Gap
2 – Villalpando-Cebolletas
3 – Cabrestantes
4 – Villalpando –Salto
5 – Villalpando -Capulin
6 – La Loca Northwest
7 –Loca Angigua
8 – Mesa Los Galgos
9 – El Cubo Fault South
10 – Dolores Vein South
11 – Puertocito
12 – La Reyna
13 – Las Torres Bulk Mineable
14 – El Cubo North
15 – Almacen
16 – Fenix bulk Mineable

Strike
15,700m
1500m
1400m
1400m
1200m
1500m
500m
200m
200m
1200m
2200m
800m
1000m
1000m
500m
200m
400m
500m

1a

73

El Cubo Looking South Along the
Villalpando South Targets
Salto
Mesa Galgos
Cebolletas

Surface Trace
Villalpando Vein

74

37

9/10/2009

El Cubo Villalpando Vein
Longitudinal Projection of the Hanging Wall Geology
Minimal ore in Calderones
Exploration Targets
Small orebodies in Bufa
Major orebodies in Guanajuato Conglomerate

Guanajuato Congl
Basement Rocks

Los Cedros Fm

500 m

La Bufa Rhyolite

Calderones Fm

75

El Cubo Cebolletas Target Long Section

4.0m
3.1 Au + 27 Ag

4.0m
7.7 Au + 78 Ag
0.5m
4.1 Au + 430 Ag

0.7m
6.1 Au + 88 Ag

76

38

9/10/2009

El Cubo Villalpando Capulin
Longitudinal Projection Hanging Wall Geology
 Presently
driving decline
drift for drill
access 2010

Target

Target

77

El Cubo
Loca Antigua & La Loca NW Targets
 Loca Antigua is old section of mine – few records
 Drifting & drilling gap between Loca NW and Loca Antigua
 Drill deeper into La Bufa in 2010

78

39

9/10/2009

El Cubo S Fault Target
Longitudinal Section



Along claim Boundary
5 Ore-grade intercepts out of 28 DDH
5 km long structure parallel to Veta Madre
Open at Depth – Most of favorable Bufa & Guanajuato Congl not tested

2m; 0.9Au
– 420Ag

0.7m;
0.46Au
– 195Ag

2m;
3.87Au –
884Ag

OPEN

1m;
0.40Au
– 196Ag

1m;
1.75Au
– 593Ag

79

El Cubo Veta Madre
Longitudinal Projection Hanging Wall Geology
Ore bodies along the Veta Madre tend to bottom at the base of the Bufa Rhyolite
and other, deeper deposits, top out near the top of the Guanajuato Conglomerate.
The Las Torres Deep Target is located within Guanajuato Conglomerate beneath
mined out ore bodies in the Bufa Rhyolite

80

40

9/10/2009

El Cubo Las Torres Target
Small, narrow deposits

Calderones Fm
Bufa
Bulk Mineable Deposits

Past mining stopped in
Loseros Fm which is soft and
does not form good veins
Bulk mineable Ag > Au 50 to
200 meters below bottom of
Guanajuato Shaft in
Guanajuato Conglomerate
below the Loseros Fm

Loseros Fm.

Las Torres Target
Guanajuato Conglomerate

81

El Cubo Las Torres Target
Cross Section

82

41

9/10/2009

El Cubo Fenix – Bulk Mineable Target

 Past drilling showed
encouraging
intercepts
 Planned for infill
drilling late 2009

52m @ 0.78 AuEq

83

El Cubo 2009 Exploration Summary







El Cubo Mine Production – 80 million ounces of Silver and 2 million ounces gold
Area of District – 14 square km
Area of Mining – 7 square km
Area of Unexplored targets within the District – 7 square km
Types of Targets – veins and bulk mineable veined zones
Target Potential - + million ounces of AuEq equivalent
Historic annual exploration - 3,000 to 10,000 meters of drilling development 2,000 – 5,000 meters
40,000m drill program recommended for 2009 – 2010 to test all targets

84

42

9/10/2009

Guadalupe y Calvo Overview
Project Overview

Intercept Highlights

 100% interest in 66,883 Ha Guadalupe gold-silver
exploration project
Overview  Located about 300 km NW of Chihuahua
 past production exceeds 2 mm oz Au and 28 mm
Ag at historic grades of 37 g/t Au / 870 g/t Ag
 36,000+ hectares claim registered located to the
northwest of the Guadalupe y Calvo San Luis claim
 Inferred resource of over 2 mm oz Au Eq
Geology
 Epithermal low sulphidation deposit
 Vein widths have been observed up to 40 m
 Drill results support the potential for both open
pit and underground operations
 Scoping study / pre-feas to resume in 2010
Future
 Metallurgical testing in progress
Developments  Deposit has simple geometry - easy to develop
 Brownfields target generation program initiated
 Potential to be significant production contributor
Existing Resource
Rosario
Nankin

Tonnes
000's
11,400
400

Au Grade
g/t
2.64
9.25

Ag Grade
g/t
117
260

Contained Au
000's oz
959
118

Contained Ag
000's oz
42,300
3,300

Total Inferred

11,800

2.84

120

1,077

45,600

Hole#
GC-138
GC-139
GC-140
GC-142
GC-142
GC-143
GC-144
GC-145
GC-147
GC-147
GC-148
GC-148
GC-150
GC-151
GC-151
GC-153
GC-154
GC-155
GC-156
GC-156
GC-159
GC-160
GC-160
GC-161
GC-162
GC-165
GC-165

From (m)
106.0
167.0
88.0
230.1
263.0
221.0
251.0
240.0
52.5
260.0
14.4
222.0
122.0
86.6
198.0
218.5
11.0
68.9
32.0
172.5
16.0
24.5
198.0
9.0
256.0
9.0
169.0

To (m) Length (m) Au (g/t)
110.0
174.0
98.0
236.0
267.0
234.0
261.0
246.0
61.5
271.0
18.4
230.8
126.0
88.0
205.0
229.0
20.0
79.0
40.0
186.0
25.0
42.0
220.0
21.0
264.4
13.0
174.0

4.0
7.0
10.0
5.9
4.0
13.0
10.0
6.0
9.0
11.0
4.0
8.8
4.0
1.5
7.0
10.5
9.0
10.2
8.0
13.5
9.0
17.5
22.0
12.0
8.4
4.0
5.0

Ag (g/t) Aue (55)

0.49
0.54
1.75
2.83
0.73
0.83
0.94
1.07
1.67
0.79
5.30
0.36
2.69
23.44
0.29
0.37
2.69
0.54
0.32
0.75
5.48
1.08
0.51
1.01
0.28
2.42
0.35

44
12
70
203
73
78
125
69
88
59
131
10
209
1105
19
19
82
37
22
30
313
86
19
70
15
98
25

1.31
0.76
3.06
6.64
2.09
2.29
3.27
2.35
3.32
1.90
7.76
0.54
6.60
44.17
0.65
0.72
4.23
1.24
0.73
1.30
11.34
2.70
0.87
2.32
0.56
4.25
0.82

85

Guadalupe y Calvo 2009 Exploration

86

43

9/10/2009

GyC District Land
Map
New Gammon
Acquisition

Gammon Property
(Guadalupe)

Gammon Property
(San Luis)

87

GyC District Geology Map

NW Portion Potential
Mineralization area

Rosario Area

No symbol = Post
Mineral Tuffs

Gammon Property
(San Luis)
88

44

9/10/2009

GyC Potential Ore Trend
Gammon Property
(San Luis)

89

GyC San Luis NW Portion
Gammon Property (San
Luis NW Portion)

New Stockwork zone
200 m wide

90

45