MATERIAL CHANGE REPORT
Gammon Gold Inc.
1701 Hollis Street
Halifax, Nova Scotia, B3J 3M8
June 17, 2010
The press release attached as Schedule A was released over Canada NewsWire on June 17, 2010.
Gammon Gold Announces Shutdown of the El Cubo Operations
Gammon Gold announced today that due to continued illegal labour disruptions at its El Cubo operation as well
as the untenable financial demands made by the union workforce, as reported on June 3, 2010, it has terminated
397 union workers as of June 16, 2010 and is in the process of filing criminal charges against seven union
executives. Operations at the El Cubo mine have been suspended indefinitely.
Since acquiring the mine Management has believed that El Cubo is a modest sized operation with the potential to
be reasonably economic, however its economic viability has been wholly undermined by a legacy of unacceptably
low union productivity. This low productivity arises from an outdated collective agreement and an interfering
union executive office that appears to have put its own interest ahead of the livelihood of its workers, their families
and local communities. The El Cubo mine will be placed on care and maintenance until management determines
its next course of action.
Since 2008, the Company has invested in new equipment, introduced more efficient mining techniques, launched
a more effective work schedule, significantly improved the mine’s safety performance, introduced a production
bonus program and launched an aggressive and strategic exploration program. Nonetheless, this investment has
not delivered the anticipated productivity improvements due to the continued resistance of union workers to fully
leverage these strategic initiatives. Management, supported by the Company’s Board of Directors, has concluded
that there is a need for the Company to take a firm and decisive stance with the union and is confident that this
decision is in the best interests of the Company’s shareholder