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Stronger gold sales lift Gammon Add to ...

Gammon Gold Inc. says its first-quarter profit rose to $23.6-million as its gold sales strengthened.

The Toronto-based gold and silver mining company said the results were equal to 17 cents per share for the first quarter, compared to $12.2-million or 9 cents per share a year earlier.

The results beat the average analyst estimate had been for a profit of 16 cents per share, according to those surveyed by Thomson Reuters.

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Revenue were up to $70.3-million from $54.7-million.

Gammon closed its purchase of Capital Gold Corp. last month in a move that expanded its presence in the Mexico.

The company successfully fought off Timmins Gold Corp. of Vancouver, which had tried to persuade New York-based Capital Gold to back a rival bid.

The company has said it expects to produce 255,000 to 290,000 gold equivalent ounces at a total cash costs of $455 (U.S.) to $485 per gold equivalent ounce in 2011, assuming a gold equivalency ratio of 55-to-1.

The forecast includes 205,000 to 230,000 gold equivalent ounces, or 117,000 to 134,000 ounces of production from its Ocampo and El Cubo mines. The rest comes from its share of the production from newly acquired Capital Gold's El Chanate mine.

Gammon also expects to produce 4.84 to 5.56 million ounces of silver.

 
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