TORONTO, March 15, 2011 /PRNewswire/ -- Gammon Gold Inc.
("Gammon") (TSX:GAM) and (NYSE:GRS): Gammon today proposed to amend
its merger agreement with Capital Gold to increase the cash
component of the merger consideration to be paid to Capital Gold's
stockholders by US$0.30 per share to
US$1.09. If Capital Gold accepts
Gammon's proposed amendment and Capital Gold's stockholders approve
the merger involving Gammon Gold, Capital Gold's stockholders will
receive 0.5209 Gammon shares and US$1.09 in cash for each share of Capital Gold
common stock that they hold.
The original Gammon deal is unanimously supported by Capital
Gold's Board of Directors and has separately been endorsed by the
two leading independent proxy advisory firms, ISS and Glass
Lewis.
Commenting on the proposed amendment, Rene Marion, President and CEO of Gammon,
stated: "Our proposed increase in the merger consideration is firm
and final. The merger with Gammon is the only effective transaction
in front of Capital Gold stockholders to be voted on. Timmins' recent proposed offer does nothing in
our view to increase the attractiveness of their company or to
reduce the considerable risk and timing delay of their proposed
hostile transaction. Ultimately, the decision rests with Capital
Gold stockholders, combine with Gammon or forego the premium and
remain an independent company."
About Gammon Gold
Gammon Gold Inc. is a mid-tier gold and silver producer with
properties in Mexico. Gammon's
flagship Ocampo Property is located in Chihuahua State. Gammon also
owns the suspended El Cubo mine in
Guanajuato State and the Guadalupe y Calvo development property in
Chihuahua State. In 2010 Gammon completed option purchase
agreements to acquire the Los Jarros and Venus Projects located
directly north and east of the Ocampo mine, the Mezquite Project in Zacatecas
State, and has signed a binding Letter of Intent to joint venture
into the La Bandera gold project
in Durango State. The Company has made strategic investments in
Golden Queen Mining Co. Ltd. and Corex Gold Corporation. The
Company's Executive Office is located in Toronto, Ontario.
For further information please visit the Gammon gold website at
http://www.gammongold.com
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 obtain the approval of the transaction by Capital Gold
Corporation stockholders; 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; the ability to obtain governmental
approvals of the transaction or to satisfy other conditions to the
transaction on the proposed terms and timeframe; 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).
Additional information about the merger and where to find it
The proposed merger transaction involving Gammon Gold Inc. and
Capital Gold Corporation will be submitted to Capital Gold
Corporation's stockholders for their consideration. Gammon Gold
Inc. has filed with the SEC a Registration Statement on Form F-4
containing a definitive proxy statement/prospectus and each of
Gammon Gold Inc. and Capital Gold Corporation may file with the SEC
other documents regarding the proposed transaction. Stockholders
are encouraged to read the definitive proxy statement/prospectus
regarding the proposed transaction, as well as other documents
filed with the SEC because they contain important information. The
registration statement was declared effective by the SEC on
February 17, 2011, and the definitive
proxy statement/prospectus has been mailed to Capital Gold
stockholders on or about February 17,
2011. Stockholders may obtain a free copy of the definitive
proxy statement/prospectus, as well as other filings containing
information about Gammon Gold Inc. and Capital Gold Corporation,
without charge, at the SEC's Internet site (http://www.sec.gov).
Copies of the definitive proxy statement/prospectus and the filings
with the SEC that are incorporated by reference in the definitive
proxy statement/prospectus can also be obtained without charge, by
directing a request to Gammon Gold, Inc., Investor Relations, 1701
Hollis Street, Suite 400, Founders Square, P.O. Box 2067,
Halifax, Nova Scotia, B3J 2Z1,
Canada, or to Capital Gold
Corporation, Investor Relations, 76 Beaver Street, 14th floor,
New York, New York 10005. Gammon
Gold Inc., Capital Gold Corporation, their respective directors and
executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding Gammon Gold Inc.'s
directors and executive officers is available in its Annual Report
on Form 40-F for the year ended December 31,
2009, which was filed with the SEC on March 30, 2010, as amended by Amendment No. 1 to
Annual Report on Form 40-F/A, which was filed with the SEC on
May 13, 2010, in its notice of annual
meeting and proxy circular for its most recent annual meeting,
which was filed with the SEC on April 15,
2010, and the above-referenced Registration Statement on
Form F-4, which was filed with the SEC on February 15, 2011. Information regarding Capital
Gold Corporation's directors and executive officers is available in
Capital Gold Corporation's Form 10-K/A, which was filed with the
SEC on November 23, 2010. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, is contained in the definitive
proxy statement/prospectus and other relevant materials filed with
the SEC.
For further information: For further information: Rene Marion, President and Chief Executive
Officer, Gammon Gold Inc., +1-416-646-3825; Anne Day, Director of Investor Relations, Gammon
Gold Inc., +1-416-646-3825