This excerpt taken from the GRS 6-K filed May 7, 2008.
(1)Gold equivalent ounces are calculated based on actual sales.
(2)The calculation of total cash cost per gold ounce includes the by-product silver sales revenue.
Managements Discussion and
Net Free Cash Flow
Net free cash flow represents an indication of the Companys continuing capacity to generate discretionary cash flow from operations, comprising cash flows from operating activities net of total capital expenditures. It does not necessarily represent the cash flow in the period available for management to use at its discretion, which may be affected by other sources and non-discretionary uses of cash. The following is a reconciliation of net free cash flow to the financial statements:
Risks and Uncertainties
The operations of Gammon are high-risk due to the nature of mining, exploration, and development activities, all of which are conducted in Mexico. For a more detailed discussion of the risk factors and other information, please refer to the Companys 2007 MD&A, and 2007 Annual Information Form, which are available at www.sedar.com or www.gammongold.com.
Changes in Accounting Policies