* Says drill results raise reserves at the Ocampo project
* Says mines on track for production by mid-2011
* Shares up 4 percent
(Recasts; adds details, updates shares)
Dec 9 Gammon Gold GAM.TO said drill results
at the Ocampo property in northern Mexico surpassed its
expectations, raising hopes for higher reserves at its flagship
The mid-tier gold producer, which currently expects 2010
production of 180,000-200,000 gold equivalent ounces for
Ocampo, forecast "bonanza grades" from the San Amado mine in
the project and said the Santa Eduviges mine showed grades
above its expectations.
The company said that the drill results put the mines on
track for production by mid-2011. It also made four new
discoveries in the project.
"Not only have we been able to delineate numerous
high-grade drill intercepts on known veins, we have identified
a number of new discoveries," Peter Drobeck, senior vice
president of exploration and business development, said in a
As of Oct. 31, the company -- which is in a takeover battle
with Timmins Gold TMM.V for Capital Gold CGC.A (CGC.TO) --
has drilled 105,903 meters at Ocampo, using 12 drill rigs
working on the surface and underground.
Gammon Gold said it has expanded the exploration program at
the project to the year end.
The company's shares, which have gained 10 percent in the
last three months, were trading up 1 percent at C$7.72 Thursday
morning on the Toronto Stock Exchange. They earlier touched a
high of C$7.98.
(Reporting by Aftab Ahmed in Bangalore; Editing by
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