Gammon Gold Forecasts Higher Production

HALIFAX, Nova Scotia (AP) — Gammon Gold Inc. on Tuesday said it expects its gold production to be higher for the next three years.

For 2010, the company expects to produce between 150,000 ounces and 180,000 ounces of gold. And by 2012, it expects to produce 175,000 ounces to 205,000 ounces.

A mill expansion and completion of the development of the Santa Eduviges underground mine in Mexico will help boost production, and higher production at existing operations should lower the company's average cost to produce an ounce of gold over the next three years.

Its total cash cost per ounce of gold will be $440 to $475 this year, compared with $395 to $430 in 2012, Gammon said.

Shares of Gammon Gold fell 69 cents, or 8 percent, to $7.73 in afternoon trading.

The company reported Tuesday that its fourth-quarter profit fell to 10 cents per share, from 26 cents per share a year earlier, as a result of unfavorable foreign exchange rates and tax expenses.

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