TORONTO, April 8, 2011 /PRNewswire-FirstCall/ -- Gammon
Gold Inc. (TSX:GAM) (NYSE:GRS) ("Gammon") is pleased to announce
that it has completed its acquisition of Capital Gold Corporation
(NYSE AMEX:CGC) (TSX:CGC). Capital Gold will operate as a
subsidiary of Gammon Gold. Shares of Capital Gold will be delisted
from trading on the NYSE AMEX effective Friday, April 8, 2011.
Shareholders of Capital Gold voted to approve the merger with
Gammon at a special meeting of shareholders held on April 1, 2011. More than 82 percent of Capital
Gold's shareholders voted, of which 32,353,144 shares (or close to
2/3) voted in favour of the transaction.
The acquisition of Capital Gold significantly increases Gammon's
gold production and almost doubles its gold reserves, while
strengthening the Company's position as a leading, low cost,
diversified gold and silver producer focused on Mexico.
With Capital Gold's El Chanate mine contributing to production
immediately and El Cubo ramping up
to full-scale production, Gammon will shortly be operating three
100% owned, fully built mines in Mexico, advancing two significant development
projects, and managing a robust portfolio of exploration stage
properties.
"We are pleased to complete the acquisition of Capital Gold with
the support of Capital Gold's shareholders. Gammon's operational
experience and robust cash flow profile will allow our team to
immediately enhance operations at El Chanate and accelerate the
development of the underground Orion project," stated Rene Marion, President and CEO of Gammon. He
continued, "In approving the transaction, Capital Gold's
shareholders clearly recognized the value of combining the assets
of the two companies to create a leading, low cost, diversified
gold and silver producer with excellent organic growth
opportunities."
Gammon's lead financial advisor for the transaction was Dundee
Securities. UBS Securities Canada Inc. was also retained as an
advisor. Gammon's Canadian legal counsel was Fasken Martineau
DuMoulin LLP and its U.S. legal advisor was Kirkland & Ellis
LLP.
Capital Gold's lead financial advisor for the transaction was
Cormark Securities Inc. Stifel, Nicolaus & Company,
Incorporated rendered fairness opinions to Capital Gold's board of
directors. Capital Gold's legal counsel was Ellenoff Grossman &
Schole LLC. Ballard Spahr LLP served as legal counsel to the
M&A Committee of the board of directors of Capital Gold and
Macleod Dixon served as Capital Gold's Canadian legal counsel.
About Gammon Gold
Gammon Gold Inc. is a publicly traded mid-tier gold and silver
producer engaged in the mining, development, exploration and
acquisition of resource properties in North America. The Company owns and operates
three producing mines in Mexico,
the Ocampo mine in Chihuahua
State, the El Chanate project in Sonora State , and the
El Cubo mine in Guanajuato State .
Gammon Gold also owns the Guadalupe y Calvo advanced exploration
property in Chihuahua State and the Orion advanced exploration
property in the State of Nayarit,
and has six exploration properties in various states throughout
Mexico. Gammon's executive office
is located in Toronto, Ontario
Canada.
Cautionary Statement
This communication may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and comparable "safe harbour" provisions of applicable Canadian
legislation, including, but not limited to, statements relating to
anticipated financial and operating results, the companies' plans,
objectives, expectations and intentions, cost savings and other
statements, including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," "will," "should," "may,"
and other similar expressions. Such statements are based upon the
current beliefs and expectations of our management and involve a
number of significant risks and uncertainties. Actual results may
differ materially from the results anticipated in these
forward-looking statements. The following factors, among others,
could cause or contribute to such material differences: the ability
to ramp up El Cubo to full-scale
production, the ability to enhance operations at El Chanate and to
accelerate the development of the Orion project, the ability to
realize the expected synergies resulting from the transaction in
the amounts or in the timeframe anticipated; the ability to
integrate Capital Gold Corporation's businesses into those of
Gammon Gold Inc. in a timely and cost-efficient manner; and the
outcome of pending litigation related to the proposed acquisition
of Capital Gold Corporation. Additional factors that could cause
Gammon Gold Inc. and Capital Gold Corporation's results to differ
materially from those described in the forward-looking statements
can be found in the 2009 Annual Report on Form 40-F, as amended by
Amendment No. 1 to Annual Report on Form 40-F/A, for Gammon Gold
Inc. and the Annual Report on Form 10-K, as amended by Form 10-K/A,
of Capital Gold Corporation for the fiscal year ended July 31, 2010 filed with the Securities and
Exchange Commission and available at the Securities and Exchange
Commission's Internet site (http://www.sec.gov).
For further information: For further information: please visit
the Gammon Gold website at http://www.gammongold.com or contact:
Rene Marion, President and Chief
Executive Officer, Gammon Gold Inc., +1-647-260-8880; Anne Day, Director of Investor Relations, Gammon
Gold Inc., +1-647-260-8880.
SOURCE Gammon Gold Inc