UPDATE 1-Gammon Gold to invest C$8 mln in Golden Queen

* Gammon to buy 5 mln units of Golden Queen

* Subscription price for units is C$1.60/unit

* Gammon to hold about 5.3 pct of issued, outstanding shrs

* Transaction seen closing on or before June 1

May 28 (BestGrowthStock) – Gammon Gold Inc (GAM.TO: ) said it will
acquire 5 million units of Golden Queen Mining Co Ltd (GQM.TO: )
for C$8 million, following a private placement.

The subscription price for the units is C$1.60 per unit,
Gammon said in a statement.

After giving effect to the private placement, Gammon will
hold about 5.3 percent of the issued and outstanding common
shares of Golden Queen.

It will have the right to participate in all future
financings of Golden Queen to maintain its proportionate
shareholding, Gammon said. Each unit consists of one common
share, one quarter of one share purchase warrant exercisable at
C$1.75, and one quarter of one share purchase warrant
exercisable at C$2.00 for a period of 18 months from the
closing date of the transaction.

The transaction is expected to close on or before June 1.

Golden Queen is a gold exploration and development company.
The company’s principal asset is the 100 percent interest in
the pre-development stage gold-silver Soledad Mountain property
in Kern County, Southern California.

Shares of Gammon Gold were down 1 percent at C$7.76 in
early morning trade on the Toronto Stock Exchange. Golden Queen
shares were flat at C$1.50 Friday.

Investing Research

(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by
Aradhana Aravindan)

UPDATE 1-Gammon Gold to invest C$8 mln in Golden Queen