N.S. gold firm settles lawsuit with $200,000 payment to U.S. fund

By The Canadian Press

HALIFAX - Nova Scotia-based Gammon Gold (TSX: GAM.TO) has settled a lawsuit from a U.S. metals investment firm that alleged Gammon overstated gold production figures at its Mexican mines.

The out-of-court deal provides Midas Funds Inc. of New York with a $200,000 cash payment.

However, in a news release issued Wednesday, the company says it isn't admitting liability and notes the settlement "removes the cost and distraction of this litigation going forward."

Midas had invested in Gammon during a public offering of $20 shares in April 2007, and had claimed Gammon provided incorrect information that has cost the shareholder "millions of dollars."

The mining firm issued a release at the time stating the allegations are "without merit" and promising a "vigorous defence" to the claims.

The gold and silver miner reported profits of US$6.5 million in the second quarter of this year, as a big jump in revenues helped the company reverse a loss last year.