July 22, 2009 / 2:25 PM / 9 years ago

UPDATE 1-Gammon Gold cuts 2009 production outlook

* Sees 2009 gold production 150,000-170,000 ounces

* Sees 2009 silver production 5.6-6.4 mln ounces

* Says 2010 forecast remains unchanged

* Shares down 2 pct

July 22 (Reuters) - Canadian gold producer Gammon Gold Inc GAM.TO cut its full-year production outlook to reflect the shortfall caused by a labor dispute at its El Cubo gold mine in the first half of the year.

The company now expects gold production of 150,000 ounces to 170,000 ounces and silver production of 5.6 million ounces to 6.4 million ounces in 2009.

It had previously forecast gold production between 185,000 ounces and 205,000 ounces and silver production of 8.2 million ounces to 8.9 million ounces.

“As a result of the lower consolidated production levels achieved in the quarter, consolidated cash costs are expected to be between $445 and $465 per gold equivalent ounce,” Chief Executive Rene Marion said in a statement.

In June, Mexican miners lifted a nearly two-month-long strike at the company’s gold mine after winning a wage deal. [ID:nN15201166]

The company, however, maintained its full year production outlook for 2010 at 200,000 to 220,000 gold ounces, and 8.5 million to 9.3 million silver ounces.

Gammon said for the second quarter it produced a total of 31,115 ounces of gold, down from the 43,465 ounces of gold produced in the same period last year.

Shares of the company were down 19 Canadian cents at C$8.38 in morning trade Wednesday on the Toronto Stock Exchange.

For related alerts, please double click on [ID:nWNAB0078] (Reporting by Isheeta Sanghi in Bangalore; Editing by Aradhana Aravindan)

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