Renewal of the Penoles Lease Agreement

 

HALIFAX, NS - Gammon Gold Inc. reported that it has successfully renewed the Penoles Lease Agreement for an additional three-year term. The Penoles Lease Agreement provides Gammon with the mining rights and use of the Las Torres processing and administration facilities located at Gammon's El Cubo Mine. In 2008, all processing and administration at our El Cubo mine was consolidated to the lower cost, higher capacity Las Torres mill.

The renewal of the Penoles lease, combined with the adoption of a 7-day continuous work schedule will allow Gammon to continue to benefit from the enhanced economics of the Las Torres mill. As the Company drives improved productivities at its El Cubo operations it can leverage the additional processing capacity available at Las Torres.