Gammon Gold Announces the Dismissal of Villagomez El Cubo Claim

TSX: GAM / AMEX: GRS / BSX: GL7

HALIFAX, May 27 /CNW/ - Gammon Gold Inc. ("Gammon") (TSX:GAM and AMEX:GRS): is pleased to announce that the courts of the State of Guanajuato have dismissed a $13 million action brought against Metales, an inactive subsidiary of Gammon, initiated by Rafael Villagomez, a former 50% owner of the El Cubo mine which Gammon's wholly owned subsidiary, Mexgold Resources Inc., acquired in 2004. The Company has always steadfastly maintained that the action was without merit, a position that was upheld by the Court on May 21, 2008.

The decision by the court to dismiss the action supports Gammon's strategy to vigorously defend itself against any claims that the Company feels are without merit. The Company is confident that it incorporates best practices throughout the organization to endorse this strategic position.

"We are very pleased that the recent court decision was made in our favour and that the case was summarily dismissed." stated Rene Marion, Chief Executive Office of Gammon Gold. He continued, "This ruling confirms our strategy of strongly defending ourselves against all actions as we continue to move forward with expanding our business model and positioning Gammon for realizing its growth potential."

About Gammon Gold

Gammon Gold Inc. is a Nova Scotia based mid-tier gold and silver producer with properties in Mexico. The Company's flagship Ocampo Project in Chihuahua State achieved commercial production in January 2007. Gammon Gold also operates its El Cubo operation in Guanajuato State and has the promising development Guadalupe y Calvo property in Chihuahua State. The Company remains 100% unhedged.

    
                             Cautionary Statement

    Cautionary Note to US Investors - The United States Securities and
Exchange Commission permits US mining companies, in their filings with the
SEC, to disclose only those mineral deposits that a company can economically
and legally extract or produce. This press release uses certain terms, such as
"measured," "indicated," and "inferred" "resources," that the SEC guidelines
strictly prohibit US registered companies from including in their filings with
the SEC. US Investors are urged to consider closely the disclosure in Gammon
Gold's Annual Report on Form 40-F (File No. 001-31739), which may be secured
from Gammon Gold, or from the SEC's website at http://www.sec.gov/edgar.shtml.

    No stock exchange, securities commission or other regulatory authority
    has approved or disapproved the information contained herein.

    Certain statements included herein, including information as to the future
financial or operating performance of the Company, its subsidiaries and its
projects, constitute forward-looking statements. The words "believe",
"expect", "anticipate", "contemplate", "target", "plan", "intends",
"continue", "budget", "estimate", "forecast", "may", "will", "schedule" and
similar expressions identify forward-looking statements. Forward-looking
statements include, among other things, statements regarding targets,
estimates and assumptions in respect of gold and silver production and prices,
operating costs, results and capital expenditures, mineral reserves and
mineral resources and anticipated grades, recovery rates, future financial or
operating performance, margins, operating and exploration expenditures, costs
and timing of the development of new deposits, costs and timing of
construction, costs and timing of future exploration and reclamations
expenses. Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by the Company,
are inherently subject to significant business, economic, competitive,
political and social uncertainties and contingencies. Many factors could cause
the Company's actual results to differ materially from those expressed or
implied in any forward-looking statements made by, or on behalf of, the
Company. Such factors include, among others, known and unknown uncertainties
and risks relating to additional funding requirements, reserve and resource
estimates, commodity prices, hedging activities, exploration, development and
operating risks, illegal miners, political and foreign risk, uninsurable
risks, competition, limited mining operations, production risks, environmental
regulation and liability, government regulation, currency fluctuations, recent
losses and write-downs, restrictions in the Company's loan facility,
dependence on key employees, possible variations of ore grade or recovery
rates, failure of plant, equipment or process to operate as anticipated,
accidents and labour disputes. Investors are cautioned that forward-looking
statements are not guarantees of future performance and, accordingly,
investors are cautioned not to put undue reliance on forward-looking
statements due to the inherent uncertainty therein.
    

Contacts

please visit the Gammon Gold website at www.gammongold.com or contact: Rene Marion
Chief Executive Officer
Gammon Gold Inc.
(902) 468-0614

Anne Day
Director of Investor Relations
Gammon Gold Inc.
(902) 468-0614