Gammon Gold posts 2Q loss on forex changes

HALIFAX, Nova Scotia -- Gammon Gold Inc. posted a second-quarter loss Thursday as fluctuations in foreign currency exchange rates weighed down the Halifax, Canada-based mining company's results.
Gammon said it lost $7.6 million, or 6 cents per share, for the three months ended June 30. That compares with a restated profit of $4.8 million, or 4 cents per share, during the same period last year.

The results included a $7 million foreign exchange loss due to the strengthening of the Mexican peso and Canadian dollar versus the U.S. dollar.
Revenue from mining operations slid 33 percent to $43.3 million from $64.6 million.
Analysts surveyed by Thomson Reuters expected profit of 6 cents per share on revenue of $44.1 million. Those estimates usually exclude one-time items.

During the quarter, Gammon said it produced 31,115 ounces of gold, 1,083,471 ounces of silver - or 47,123 gold equivalent ounces. Using a long-term gold-to-silver ratio of 55:1, gold equivalent production was 50,814 ounces.

Production in Mexico at its Ocampo mine was in line with first-quarter levels, while production at its El Cubo mine was hampered by a seven-week labor strike, the company said.
It said it recruited more than 100 new miners at Ocampo's underground operations. And a $12.3 million, 123,000-meter exploration program at Ocampo remains on target, with 72,822 meters drilled in 397 holes at the end of July.
The company said it repaid $15 million of a term loan on July 2.
Shares of Gammon slid 1 cent to $6.37 in late morning trading.