December 7, 2010 / 2:41 PM / in 7 years

UPDATE 1-Gammon Gold says 2010 Ocampo production on track

* Says Oct-Nov production at 32,548 gold equivalent ounces

* Shares up 1 pct

Dec 7 (Reuters) - Gammon Gold GAM.TO, a mid-tier gold producer with mines in Mexico, said it was on track to meet its 2010 production forecast for its Ocampo mine in northern Mexico.

The company, which is in a battle with Timmins Gold TMM.V to acquire Capital Gold CGC.A CGC.TO, said the Ocampo mine produced 32,548 gold equivalent ounces in the first two months of the fourth quarter.

Last quarter, the mine produced 48,650 ounces of gold equivalent.

Gammon Gold had forecast 2010 Ocampo production of 180,000-200,000 gold equivalent ounces, and it has produced 164,886 gold equivalent ounces so far.

The company also said total cash costs per gold equivalent ounce averaged $437, above its 2010 target of $410-$435 per ounce.

Gammon Gold shares were up 1 percent at C$7.95 in early Tuesday morning trade on the Toronto Stock Exchange. They have gained more than 12 percent in value since the company bid for Capital Gold on Oct. 1. [ID:nN06197231] (Reporting by Aftab Ahmed in Bangalore; Editing by Anne Pallivathuckal)

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