Gammon Gold Signs Definitive Agreement on the Los Jarros Properties, Chihuahua Mexico

Wednesday, Sep 01, 2010

Gammon Gold Inc. ("Gammon") (TSX:GAM and
NYSE:GRS): Gammon is pleased to announce that it has signed the definitive
purchase option agreements on the Los Jarros Properties, in Chihuahua State,
Mexico.

"I am very pleased that we have completed the definitive option agreements
on the Los Jarros concessions with Valdez Gold Inc. ("Valdez"). The addition
of this project to Gammon's existing land package gives the Company a
commanding position in the greater Ocampo / Pinos Altos / Concheno district.
These holdings allow Gammon to extend exploration from the Ocampo and Venus
projects to prospective ground between these two properties and our existing
land package, as well as new ground in this large district." stated Peter
Drobeck, Senior Vice President of Exploration & Business Development. He
continued "Valdez completed substantial exploration on these properties in
the 1990's, resulting in the definition of a disseminated epithermal gold
occurrence in the southern part of the property. This target area, the
actual 'Los Jarros'
occurrence, consists of a central rhyolite dome with surrounding silicified
breccias."

Historical drilling by Valdez in 1999 cut strongly anomalous gold not only
along the flanks of the dome, but also in a breccia complex on the south
side of the dome system. The best drill hole from the breccia cut a long
intercept of highly anomalous gold: 105.6 metres grading 0.56 grams per
tonne gold from 1.5 metres depth, including 26.1 metres grading 0.70 grams
per tonne gold from 81.0 meters depth. The gold mineralization in the
breccias complex is disseminated in character, with all samples in the first
109 metres of the drill hole falling between 0.20 and 2.12 grams per tonne
gold. Other intercepts in the dome margin also discovered substantially
anomalous gold in what appears to be a structurally-controlled setting.
Selected results of Valdez' past drilling are summarized in Table 1.

Apart from the disseminated epithermal target in the southern block of
claims, the Los Jarros properties control the potential northwest strike
extent of the Concheno vein system (being developed by Frisco Mining).
Valdez' historical work had identified three unexplained stream-sediment
gold anomalies within the land package. Gammon intends to explore the entire
Los Jarros Project aggressively in the coming dry season.

The Company plans to conduct a detailed geologic mapping program on the
southern Los Jarros prospect, followed up by drilling extensions to the
anomalous mineralization discovered to date, and to mount a regional
reconnaissance program on the remainder of the property to determine if
viable exploration targets emerge.

Source: Canada Wire