Filed by Gammon Gold Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Capital Gold Corporation
Commission File No.: 001-34618
This filing, which includes (i) materials used in a presentation held on November 8, 2010 for investors and (ii) materials posted on the website of Gammon Gold Inc. on November 8, 2010 regarding the financial results for the fiscal quarter ended September 30, 2010, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and comparable “safe harbour” provisions of applicable Canadian legislation, including, but not limited to, statements relating to anticipated financial and operating results, the companies’ plans, objectives, expectations and intentions, cost savings and other statements, including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of our management and involve a number of significant risks and uncertainties. Actual results may differ materially from the results anticipated in these forward-looking statements. The following factors, among others, could cause or contribute to such material differences: the ability to obtain the approval of the transaction by Capital Gold Corporation stockholders; the ability to realize the expected synergies resulting from the transaction in the amounts or in the timeframe anticipated; the ability to integrate Capital Gold Corporation’s businesses into those of Gammon Gold Inc. in a timely and cost-efficient manner; the ability to obtain governmental approvals of the transaction or to satisfy other conditions to the transaction on the proposed terms and timeframe; and the outcome of pending litigation related to the proposed acquisition of Capital Gold Corporation. Additional factors that could cause Gammon Gold Inc. and Capital Gold Corporation’s results to differ materially from those described in the forward-looking statements can be found in the 2009 Annual Report on Form 40-F, as amended by Amendment No. 1 to Annual Report on Form 40-F/A, for Gammon Gold Inc. and the Annual Report on Form 10-K of Capital Gold Corporation for the fiscal year ended July 31, 2010 filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission’s Internet site (http://www.sec.gov).
The proposed merger transaction involving Gammon Gold Inc. and Capital Gold Corporation will be submitted to Capital Gold Corporation’s stockholders for their consideration. Gammon Gold Inc. and Capital Gold Corporation have filed with the SEC a Registration Statement on Form F-4 containing a preliminary proxy statement/prospectus and each of the companies plans to file with the SEC other documents regarding the proposed transaction. Stockholders are encouraged to read the preliminary proxy statement/prospectus regarding the proposed transaction and the definitive proxy statement/prospectus when it becomes available, as well as other documents filed with the SEC because they contain important information. Stockholders may obtain a free copy of the preliminary proxy statement/prospectus, and will be able to obtain a free copy of the definitive proxy statement/prospectus when it becomes available, as well as other filings containing information about Gammon Gold Inc. and Capital Gold Corporation, without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the definitive proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the definitive proxy statement/prospectus can also be obtained, when available, without charge, by directing a request to Gammon Gold, Inc., Investor Relations, 1701 Hollis Street, Suite 400, Founders Square, P.O. Box 2067, Halifax, Nova Scotia, B3J 2Z1, Canada, or to Capital Gold Corporation, Investor Relations, 76 Beaver Street, 14th floor, New York, New York 10005.
Gammon Gold Inc., Capital Gold Corporation, their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Gammon Gold Inc.’s directors and executive officers is available in its Annual Report on Form 40-F for the year ended December 31, 2009, which was filed with the SEC on March 30, 2010, as amended by Amendment No. 1 to Annual Report on Form 40-F/A, which was filed with the SEC on May 13, 2010, in its notice of annual meeting and proxy circular for its most recent annual meeting, which was filed with the SEC on April 15, 2010, and the above-referenced Registration Statement on Form F-4, which was filed with the SEC on November 4, 2010. Information regarding Capital Gold Corporation’s directors and executive officers is available in Capital Gold Corporation’s proxy statement for its most recent annual meeting, which was filed with the SEC on December 14, 2009. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the above-referenced Registration Statement on Form F-4, which was filed with the SEC on November 4, 2010, and other relevant materials to be filed with the SEC when they become available.
THE FOLLOWING ARE MATERIALS USED IN A PRESENTATION HELD ON NOVEMBER 8, 2010 FOR INVESTORS
Gammon Gold Inc.
2010 FINANCIAL RESULTS CONFERENCE CALL & WEBCAST
November 8, 2010
Gammon Gold Inc.
WELCOMING REMARKS
René Marion, President & CEO
2
Gammon Gold Inc.
Forward Looking Statements
3
Forward Looking Statements
This presentation includes certain “forward-looking statements” or “forward-looking information”. Allstatements, other than statements of historical fact, included in this presentation are forward-looking statements that involve risks and uncertainties. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “forecast”, “may”, “will”, “schedule” and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions inrespect of gold and silver and gold equivalent production and prices, cash and operating costs, results and capital expenditures, mineral reserves and mineral resources and anticipated grades, recovery rates, future financial or operating performance, margins, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of construction, costs and timing of future exploration and reclamation expenses, anticipated 2010 year-end and 2011 results, our ability to fully fund our business model, including our capital and exploration program, internally, anticipated 2010 year-end and 2011interim and annual gold and silver production and the cash and operating costs associated with the same, the ability to achieve productivity and operational efficiencies, the ability toachieve cash flow margin improvements, the ability to complete further reduction in the open pitstripping ratio, the ability to develop and put into production our exploration targets and the timing of each thereof, the acquisition of Capital Gold (the “Acquisition”) including whether the completion of the Acquisition will ultimately occur, whether the anticipated synergies of the proposed acquisition will occur, incorrect assessment of the value of the properties of Capital Gold and failure to obtain the required security holder, regulatory, third party and other approvals and the out come of any pending litigation related to the Acquisition. Forward-looking statements are necessarily base dupon anum berof estimate sand assumptions that, while considered reasonable by Gammon Gold, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Important factors that could cause actual results to differ materially from Gammon Gold’s expectations include, among others, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluation sand changes in project parameters as plans continue to be refined, future prices of gold and silver, known and unknown uncertainties and risks relating to additional fund ingrequirements, reserve and resource estimates, hedging activities, development and operating risks, illegalminers, uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recentlosses and write-downs, restrictions in GammonGold’s loan facility, dependence on key employees, possible variations of or egrad eorrecovery rates, failure of plant, equipment or process to operate a santicipated, accidents and labourd isputes as well as those factors discussed in the section entitled “RiskFactors” in Gammon Gold’s Form40-FA as filed with the United States Securities and Exchange Commission. Although Gammon Gold has attempted to identify important factors that could cause actual results to differmaterially, there may be other factors that cause results not to beasanticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differmaterially from thoseanticiped insuch statements. Forward-looking statements are not guarantees of future performance. Accordingly, readers should not place un due reliance on forward-looking statements.
Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources
This presentation uses the terms “Measured”, “Indicated” and “Inferred” Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. “Inferred Resources” have agreat amount of uncertainty as to their existence and as to their economic and legal feasibility. It can not be assumed that all or any part of an in ferred resource will ever be up graded to a high ercategory. Under Canadian rules, estimates of Inferred Resources may not form the basis off easibility or othere conomic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into reserves. U.S. investors are also cautioned not to assume that all or any part of an Inferred mineral Resource exists, or is economically or legally mineable.
Welcoming Remarks
4
Participants:
René Marion, President & CEO
Scott Perry, CFO
Russell Tremayne, COO
Anne Day, Director of IR
Gammon Gold Inc.
Q3 2010 OPERATIONAL OVERVIEW
René Marion, President & CEO
5
Ocampo Production & Cash Costs
621,855 24,963 27,018 ?5,000 10,000 15,000 20,000 25,000 30,000 Q1 2010 Q2 2010 Q3 2010 Gold Production 961 1,067 1,190 800 850 900 950 1,000 1,050 1,100 ,150 1,200 Q1 2010 Q2 2010 Q3 2010 Silver Production (000’s)
OcampoProduction Q3 2010 Q2 2010 Q1 2010
Gold Ounces Produced 27,018 24,963 21,855
Silver Ounces Produced 1,189,769 1,066,998 960,817
Gold Eq. Oz. Produced (55:1)(1) 48,650 44,363 39,325
Total Cash Costs –Ocampo Q3 2010 Q2 2010 Q1 2010
Cash Costs per Gold Eq. Oz. (55:1)(1) $411 $430 $423
Cash Costs per Gold Ounce($121)($33) $8
(1)
Comparative performance metrics using the Company’s long term gold equivalency guidance ratio (55:1)
Ocampo improving quarter over quarter
On target to meet 2010 guidance for Ocampo
Ocampo Underground
71,3771,5001,5968009001,0001,1001,2001,3001,4001,5001,600Q1 2010Q2 2010Q3 2010 Underground
Avg. TPD 3,9034,7446,54601,0002,0003,0004,0005,0006,0007,000Q1 2010Q2 2010Q3 2010Total
Underground Development (metres)
Santa Eduviges development progressing
Anticipated ore production by end of Q4
Ocampo Open Pits
893,730103,11797,992020,00040,00060,00080,000100,000 Q1 2010 Q2 2010 Q3 2010 Open Pits –Avg. TPD0.971.011.460.400.600.801.001.201.40 Q1 2010 Q2 2010 Q3 2010 Avg. Head Grade (Aue 55:1)
September productivity of 108,554 tpd was best ever monthly result from the open pits
Ocampo Mill
92,920 3,182 3,113 ?500 1,000 1,500 2,000 2,500 3,000 Q1 2010Q2 2010Q3 2010
Mill Tonnes per Day3.53 3.50 3.87 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.4 3.60 3.80 4.00 Q1 2010Q2 2010Q3 2010
Mill Grade (Aue 55:1)
The fourth filter press is currently being commissioned and will complete the redundancy program at the mill facility
Ocampo Heap Leach
107,32810,0176,83002,0004,0006,0008,00010,00012,000Q1 2010Q2 2010Q3 2010Heap Leach Stacked TPD0.720.810.94-0.10
0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Q1 2010Q2 2010Q3 2010Average Grade Gold Eq. (55:1)
The conversion of the heap leach facility to a valley fill design mitigated the impact of the
above average seasonal rainfall.
Recent Highlights
11
Growth>Signed Definitive Merger Agreement to acquire Capital Gold Corporation
>Strategic investment in CorexGold Corporation
>Acquired a new block of 3 claims on the west side of Ocampo
>Announced 3 new drill targets at the Venus property
Finance>Expanded and enhanced credit facility for up to $100M
Reserves>Three new discoveries added 128k gold eq.* oz to Reserves at Ocampo
* NI 43?101 compliant reserve tables are provided in the Appendix section of this presentation
Gammon Gold Inc.
Q3 2010 FINANCIAL OVERVIEW
Scott Perry, CFO
12
Consolidated Production & Cash Costs
13
Consolidated Production Q3 2010 Q2 2010 Q1 2010 YTD
Gold Ounces 27,018 29,231 28,431 84,680
Silver Ounces 1,189,769 1,280,201 1,284,071 3,754,041
Gold Eq. Oz. (55:1)(1) 48,650 52,506 51,778 152,934
Consolidated Cash Costs Q32010 Q2 2010 Q1 2010 YTD
TotalCash Costs per goldeq. oz.(55:1)(1) $419 $494 $490 $469
Total Cash Costs per goldoz.($108) $70 $125 $33
AverageRealized gold price $1,230 $1,201 $1,107 $1,179
AverageRealized gold price $19.19 $18.47 $16.81 $18.12
(1)
Comparative performance metrics using the Company’s long term gold equivalency guidance ratio (55:1)
28,43129,23127,01810,00012,00014,00016,00018,00020,00022,00024,00026,00028,00030,000 Q1 2010 Q2 2010 Q3 2010Gold Production1,2841,801,19002004006008001,0001,2001,400 Q1 2010 Q2 2010 Q3 2010Silver Production (000’s)
Consolidated cash costs include El Cubo
Q3 2010 Financial Performance
14
ConsolidatedFinancial Results Q3 2010 Q2 2010 Q1 2010
Revenue (thousands) $55,518 $57,044 $54,687
Earnings before other items (per share) $0.08 $0.08 $0.09
Net earnings/loss (per share) $0.05($1.30) $0.01
Cash from operations (millions) $31.2 $15.7 $15.0
Cash from operations(per share) $0.23 $0.11 $0.11
Net freecash flow (millions) $3.9($12.9)($7.8)
Cash on hand (millions) $107.0 $102.7 $125.0
Excluding $4.9M loss related to El Cubo costs, earnings before other items of $16M ($0.12/ps)
Excluding $4.0M cash flows related to El Cubo, cash from operations was $35.2M ($0.25/ps)
Excluding $5.9M net loss related to El Cubo, net earnings were $13.4M ($0.10/ps)
Strong positive operating cash flow –12thquarter of positive operating cash flow
Positive net free cash flow ?Capital programs largely complete
Record cash margins
Expanded and enhanced revolving line of credit of up to $100M
Unit cost performance remains strong
2010 YTD Cash Flow Overview
Year to Date Cash Flow(US$000’s)
250,000
200,000
150,000
100,000
50,000
0
128,977
83,142
8,394
62,510
17,443
10,775
19,478
3,309
106,998
Opening Cash
Mine Site OCF
Option Conversions
Capital Expenditure
Exploration
Strategic Investments
G & A & Others
Debt Repayments
Closing Cash
Gammon Gold Inc.
Credit Facility
16
Enhanced facility of up to $100M: >Syndicate of Bank of Nova Scotia and SociétéGénérale
>$75M facility that can be increased to $100M
>3 year term
>Repayable at maturity
>LIBOR plus 325?375bp
>No operational covenants
>No restriction on the use of proceeds
Gammon Gold Inc.
EXPLORATION UPDATE
René Marion, President & CEO
17
Gammon Gold Inc.
18
Ocampo Exploration
Underground Targets
64,832m drilled to Sept. 30/10
Added 40,000m in H2/10
Santa Eduviges –new Reserves of 44,961 gold eq. ounces (1)(2)(3) ?Santa Eduviges is a second underground mine located 2 km from the NE
underground
Belen/Santa Juliana –new reserves of 50,529 gold eq.(1)(2)(3)
Increased drills from 4 to 6
(1)Using the Company’s long term gold equivalency guidanceratio(55:1)
(2)NI43-101 compliant reservetables are provided in the Appendix section of this presentation
(3)ReservesasofJune30,2010
DRILL #1
DRILL #2
DRILL #3
DRILL #1
DRILL #5 ARRIVED OCT 6/10
B EL E N
DRILL #4
N E Underground
Santa Eduviges
2ndunderground mine
JESUS MARIA
SAN AMANDO
ST EDUVIGES/VETA LIBRE
ROSARIO
AVENTURERO SE
STA JULIANA
BELEN
Gammon Gold Inc.
Ocampo Exploration
19
PLAZA GALLOS
REFUGIO
PICACHO
CONICO
ESTRELLA
22,716m drilled to Sept. 30/10
Added 35,000m in H2/10
Los Molinos new Reserves of 32,260 gold eq. ounces(1)(2)(3)
Increased drills from 4 to 7
Open Pit Targets
(1) Using the Company’s long term gold equivalency guidanceratio(55:1)
(2) NI43-101 compliant reservetables are provided in the Appendix section of this presentation
(3) ReservesasofJune30,2010
Gammon Gold Inc.
20
Option to purchase a 100% interest
43,229 hectare property
Possible extensions of Pinos Altos and Frisco
Los Jarros Property
Venus & Los Jarros
Venus Property
Option to purchase a 100% interest
4,574 hectare property
Potential extensions of the Pinos Altos trend
A drilling program is targeted for Q4, 2010
Three targets identified for follow up:La Boleta
Roncesvalle
Santo Nino
O campo
4.2 Moz
Aueq
Venus
Los Jarros
La Boleta
Roncesvalle
Santo Nino
AGNICO 6.7 Moz Aueq
FRISCO 2.0 Moz AuEq
Jarros StSe3d Au Geochem
<2.00
2.00 – 10.00
10.00 – 30.00
30.00 – 100.00
>100.00
745000
750000
755000
760000
765000
770000
775000
780000
3095000
3100000
3105000
3110000
3115000
3120000
3125000
3130000
3135000
3140000
Gammon Gold Inc.
Q&A SESSION
Q3 2010 Conference Call
21
Gammon Gold Inc.
APPENDIX
Q3 2010 Conference Call
22
Gammon Gold Inc.
23
Ocampo Mine –2010 Production Outlook
Production:
2010
Gold Ounces
100,000 to 110,000
Silver Ounces
4,400,000 to 4,950,000
Gold Equivalent(1)
180,000 to 200,000
Cash Cost per Gold Equivalent Ounce(1)(2)
$410 to $435
1.Assumes a 55:1 gold to silver ratio
2.Assumes a foreign exchange rate of 12.5 Mexican pesos to one U.S. dollar
Ocampo Production Outlook
Gammon Gold Inc.
2010 New Discovery Reserve Additions
24
Notes to Mineral Resources and Reserves Tables:
1.Gold equivalent calculations us ethere serve metal prices of $945/ oz for gold and $15.20/oz for silver for ag old to silver ratio of 62.17:1.
2. Reserves additions have been calculated in accordance with NI43-101, as required by Canadian securities regulatory authorities. Inaddition, while the terms “Measured”, “Indicated and “Inferred” Mineral Resources are required pursuant to NI43-101, the SEC does not recognize such terms. Canadianst and ardsdiffer significantly from the requirement sof the SEC, and Mineral Resources disclose dinaccordance with the requirements of the SEC. Investors should understand that “Inferred” Mineral Resources have agreat amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. Inaddition, investors are cautioned not to assume that any part or all of Gammon’s Mineral Resources constitute or will be converted in to Reserves.
3.MineralReservesadditionshavebeencalculatedasatJune30,2010.
4.Graderepresentsanaverage,weightedbyreferencetotonsoforetypewhereseveralrecoveryprocessesapply.
5.The metall urgical recovery applicable for each deposit and the cut-offgrades used to determine Reserves additions as at June30, 2010 areas follows:
All ores at Ocampo demonstrate similar metallurgical recoveries regardless of whether oxides are sulfides.
6.The Los Molinas Open Pit strip ratio is 5.5:1.
7.The basis for the reserve estimation is the Learchs?Grossman pit optimization methodology.
8.Sums may not add to totals due to rounding.
Mine Au Metallurgical
Recovery (%) Ag Metallurgical
Recovery (%) Cut?off Grade
g/t
Los Molinas Mill 96 82 >2.0
Los Molinas Pit Fine Crush 82 72 >0.7?2.0
Los Molinas Coarse Crush 60 35 >0.18?0.70
Sta. Eduviges, Sta. Juliana, Belen 96 82 2.0
Ocampo Proven & Probable Reserve Additions(2)(3)(5)(6)(8)
Gold
Gold
Silver
Gold
Mineral Category
Gold
Silver
Equivalent
Tonnes
Ounces
Ounces
Equivalent Ounces
(g/t)(4)
(g/t)(4)
(g/t)(4)
(000’s)
(000’s)
(000’s)
(000’s)(1)
Los Molinas Open Pit(7)
Proven
0.72
21
1.06
785
18
531
27
Probable
0.52
18
0.80
214
4
122
6
Total Los Molinas Proven & Probable
0.68
20
1.00
999
22
653
32
Santa Eduviges Underground
Proven
4.18
85
5.56
197
26
540
35
Probable
2.42
52
3.26
94
7
158
10
Total Sta. Eduviges Proven & Probable
3.61
75
4.82
290
34
698
45
Santa Juliana/Belen Underground
Proven
2.39
254
6.47
81
6
665
17
Probable
1.91
219
5.43
192
12
1,354
34
Total Sta. Juliana/Belen Proven & Probable
2.05
229
5.74
274
18
2,019
51
Total Proven Additions
1.49
51
2.30
1,064
51
1,736
79
Total Probable Additions
1.41
102
3.05
500
23
1,634
49
Total Additions
Proven & Probable
1.46
67
2.54
1,563
74
3,370
128