Gammon Lake Resources has a 100% interest in Ocampo Gold-Silver Project located in Chihuahua, Mexico. The Company has been actively exploring the Ocampo Mining District since 1999, greatly advancing the Project toward gold-silver production, anticipated to commence within the first quarter of 2006.

A positive feasibility study was completed in November 2004 for phase one development of the Ocampo Project, demonstrating extremely robust economic potential. Annual production is expected to average 270,000 ounces gold-equivalent (170,000 oz. gold and 6-million oz. silver) over the first seven years of mining, at a cash cost of US $151.74 per gold-equivalent ounce. Production from the first year of operation is anticipated to exceed 300,000 gold-equivalent ounces. At a US $400 gold price and US $6.50 silver price, the Internal Rate of Return (IRR) for the Project is 65%.

A highly experienced mine development and operations team has been assembled to move the Ocampo Project through to production. In February 2005, John C. Thornton, Chief Operating Officer; John Roberts, Chief Mining Engineer; and Richard Jeffress, Manager of Projects, joined Gammon Lake. Together, they bring more than 100 years of industry experience to the Project. Kappes, Cassiday and Associates (KCA) of Reno, Nevada, a pioneering firm in precious metals heap leaching, has been appointed from mill and heap leach construction and commissioning. With such a strong and well experienced team in place, management is confident that construction and development of the mine site will remain on schedule and on budget.

Gammon Lake is well financed, having raised in excess of CDN $160-million to date for the Company’s exploration and development activities at Ocampo. With a CDN $110-million financing recently completed for phase one development of the Project, Gammon Lake is well positioned to meet its near-term objective of gold-silver production in 2006.

The Company has developed a very positive working relationship with both federal and state governments in Mexico. Fred George, Chairman and President of Gammon Lake, has met with Mexican government officials, including Vicente Fox, President of Mexico, to discuss the Company’s development plans at Ocampo. Government officials have demonstrated their solid commitment to the Ocampo Project and will provide both industrial electrical power to the Project and 25-kilometres of road paving. These initiatives are expected to assist in reducing capital and operating costs associated with the Project.

Gammon Lake has laid a solid foundation for continued growth and is now well on the way to meeting the Company’s near-term objective of becoming the next mid-tier producer in Mexico.

Exploration Activities Targeting Further Expansion of Gold and Silver Resources and Reserves.

One dynamic driving Gammon Lake’s growth is the tremendous resource potential at the Company’s 100%-owned Ocampo Project.

While feasibility has been completed for phase one development of the Project, tremendous potential remains for expansion of resources and reserves. Gammon has outlined a total property resource of 7.5-million ounces gold-equivalent, consisting of 4.4-million ounces of gold and 204-million ounces of silver. Measured and Indicated resources amount to 39-million tonnes grading 1.46 g/t gold and 61 g/t silver. This represents 1.85-million ounces of gold and 76.7-million ounces of silver, or 3.03-million ounces on a gold-equivalent basis. A further 21-million tonnes grading 3.75 g/t gold and 188 g/t silver remains in the inferred category, representing 2.55-million ounces of gold and 127.8-million ounces of silver (4.53-million ounces gold-equivalent).

These figures were calculated based on drilling completed prior to a June 10th, 2004 cut off date. Since June, Gammon Lake has continued an aggressive exploration program focused on upgrading and expanding resources at the Project. Data from drilling completed after the June 10th cut off will be complied into a new resource/reserve calculation to be completed prior to production. This is expected to result in a significant expansion of resources and reserves.

To date, the deposits at Ocampo are defined by 167,000-metres of drilling in almost 1000 holes. Approximately 50% of drilling has been conducted from underground drill stations, facilitated by 7-kilometres of underground development in ramps and tunnels. This underground development has helped pinpoint both known and undetected high-grade zones, with little or no surface expression, deep below the surface.

The opening of ramps and tunnels has allowed the Company to access these high-grade zones for underground drilling directly in the zones. This, in turn, has extended the depth capacity that Gammon is able to reach by completing down-dip drilling from underground drill stations. Access ramps have been constructed at a scale of 4-metres wide by 4.5-metres high to facilitate mining and extraction of ore, thereby reducing the capital required for mine development.

Developing a World-Class Gold and Silver Deposit.

The Ocampo Project encompasses 3500-hectares and consists of an Open Pit Project area centred on a northwest trending structural system called the PGR Trend, and an Underground Project area located in the Northeast. The Project is characterised by mountainous terrain that is shot through with very high-grade ore shoots, often of bonanza grade, that run over a vertical extent that has been tracked for 700-metres. The entire area is dotted at various elevations with old mines following these shoots. The highest outcrop of mineralization, at the Plaza de Gallos area, occurs at an elevation of 2,150-metres; the lowest, at the Santa Juliana Mine, is at 1,400 metres elevation.

While the evidence for a rich 700-metre ore horizon is abundant at Ocampo, not a single ore shoot has yet been tested over the entire 700-meter extent of this horizon. The area’s old-time miners were generally not able to mine at depths greater than 150 to 300 meters along the horizon, either because of limited mining technology or dewatering problems with overflowing ground water as their rudimentary underground mines sunk to the levels of the area’s high valley floors. Dewatering today is routine, but often thwarted old-time miners.

In fact, many of these ore shoots extend well below local water tables, and the gold and silver grades of some of the shoots improve as they go deeper, as much as 350 meters below the valley floors. As the first modern-day explorer at Ocampo, Gammon Lake believes it is uniquely fortunate to have 100% ownership of an entire district containing a major mineralized structural system with such a significant vertical ore horizon.

Ocampo is also blessed with another unique economic advantage: The underground silver ores tested to date are actually cyanide-leachable with very high recoveries. That is because the ore is a silver sulfide. Unlike galena or sphalerite ores, it is 90% cyanide-soluble. Test work by Kappes, Cassidy & Associates of Reno, Nevada indicates recoveries for the Northeast Underground area of 96% for gold and 93% for silver. Recoveries from the Open Pit area are 87% for gold and 72% for silver for the high-grade component of this area.

In short, the economics at Ocampo look superb.

With 7-kilometres of ramps and tunnels completed, not only to serve as mine infrastructure, but also to further open the way to examine and pinpoint continued exploration drilling, in conjunction with 5 drills running continuously, management is extremely optimistic about the resource/reserve expansion potential of the project.

Website: http://www.gammonlake.com/