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G

A

F

M



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|GAMMON LAKE
    RESOURCES INC.                  
|------------------------------------------------
|(the
    "Corporation")                         
|                                                
|ANNUAL
    INFORMATION FORM                     
|                                                
|TABLE OF
    CONTENTS                           
|                                                
|ITEM 1: CORPORATE
    STRUCTURE                 
|                                                
|1.1                                             
|1.2                                             
|                                                
|ITEM 2: GENERAL
    DEVELOPMENTS OF THE BUSINESS
|                                                
|2.1                                             
|2.2                                             
|                                                
|ITEM 3: DESCRIPTION OF THE
    BUSINESS         
|                                                
|3.1                                             
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|3.2                                             
|3.3                                             
|3.4                                             
|3.5                                             
|3.6                                             
|3.7                                             
|3.8                                             
|3.9                                             
|3.10                                            
|3.11                                            

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|3.12                                                              | Risk Factors                                             | 17
|----------------------------------------------------------------- | -------------------------------------------------------- | --
|                                                                  | 3.12.1 No
    History of Profitability                   | 17
|                                                                  | 3.12.2
    Exploration and Development Stage Corporation | 17
|                                                                  | 3.12.3 Foreign
    Operations                            | 17
|                                                                  | 3.12.4
    Government Regulations                        | 17
|                                                                  | 3.12.5 Market
    Fluctuation and Commercial Quantities  | 18
|                                                                  | 3.12.6 Mining
    Risks and Insurance                    | 18
|                                                                  | 3.12.7
    Environment Protection                        | 18
|                                                                  | 3.12.8 Capital
    Investment                            | 18
|                                                                  | 3.12.9
    Conflicts of Interest                         | 19
|                                                                  | 3.12.10
    Dependence on Key Personnel                  | 19
|                                                                  | 3.12.11 Lack of
    Active Market                        | 19
|                                                                  | 3.12.12
    Currency                                     | 19
|                                                                  | 3.12.13
    Dividends                                    | 20
|                                                                  | 3.12.14
    Competition                                  | 20
|                                                                  | 3.12.15
    Possible PFIC Status                         | 20
|                                                                  |                                                          |   
|ITEM 4: DIVIDENDS                                                 | 20                                                      
|                                                                  |                                                          |   
|ITEM 5: DESCRIPTION OF CAPITAL STRUCTURE                          | 21                                                      
|                                                                  |                                                          |   
|5.1                                                               | General                                                  | 21
|5.2                                                               | Common Shares                                            | 21
|5.3                                                               | Class A and
    Class B Preferred Shares                 | 21
|                                                                  |                                                          |   
|ITEM 6: MARKET FOR SECURITIES                                     | 21                                                      
|                                                                  |                                                          |   
|6.1                                                               | Trading Price
    and Volume                             | 21
|6.2                                                               | Prior Sales                                              | 22
|                                                                  |                                                          |   
|ITEM 7: ESCROWED SECURITIES                                       | 22                                                      
|                                                                  |                                                          |   
|ITEM 8: DIRECTORS AND OFFICERS                                    | 22                                                      
|                                                                  |                                                          |   
|ITEM 9: LEGAL PROCEEDINGS                                         | 24                                                      
|                                                                  |                                                          |   
|ITEM 10: INTEREST OF MANAGEMENT & OTHERS IN MATERIAL TRANSACTIONS | 24                                                      
|                                                                  |                                                          |   
|ITEM 11: TRANSFER AGENT AND REGISTRAR                             | 25                                                      
|                                                                  |                                                          |   
|ITEM 12: MATERIAL CONTRACTS                                       | 25                                                      
|                                                                  |                                                          |   
|ITEM 13: INTERESTS OF EXPERTS                                     | 25                                                      
|                                                                  |                                                          |   
|ITEM 14: AUDIT COMMITTEE INFORMATION                              | 25                                                      
|                                                                  | Overview                                                 | 25
|                                                                  | The Audit
    Committee's Charter                        | 26
|                                                                  | Composition of the
    Audit Committee                   | 26
|                                                                  | Audit Committee
    Oversight                            | 27
|                                                                  | Reliance on
    Certain Exemptions                       | 27
|                                                                  | Pre-Approval
    Policies and Procedures                 | 27
|                                                                  | External Auditor
    Service Fees (By Category)          | 27

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|                                       |      
|-------------------------------------- | -----
|ITEM 15: ADDITIONAL INFORMATION        | 28   
|                                       |      
|SCHEDULE "A" - AUDIT COMMITTEE CHARTER | A1-A5







|FORWARDLOOKINGSTATEMENTSCertain
    statements included or incorporated by reference in this Annual Information
    Form, including information as to the future financial or operating
    performance of the Corporation, its subsidiaries and its projects,
    constitute forward-looking statements. The words "believe", "expect",
    "anticipate", "contemplate", "target", "plan", "intends", "continue",
    "budget", "estimate", "may", "will", "schedule" and similar expressions
    identify forward-looking statements. Forward-looking statements include,
    among other things, statements regarding targets, estimates and assumptions
    in respect of gold production and prices, operating costs, results and
    capital expenditures, mineral reserves and mineral resources and anticipated
    grades and recovery rates. Forward-looking statements are necessarily based
    upon a number of estimates and assumptions that, while considered reasonable
    by the Corporation, are inherently subject to significant business,
    economic, competitive, political and social uncertainties and contingencies.
    Many factors could cause the Corporation's actual results to differ
    materially from those expressed or implied in any forward-looking statements
    made by, or on behalf of, the Corporation. Such factors include, among
    others, risks relating to additional funding requirements, reserve and
    resource estimates, gold prices, hedging activities, exploration,
    development and operating risks, illegal miners, political and foreign risk,
    uninsurable risks, competition, limited mining operations, production risks,
    environmental regulation and liability, government regulation, currency
    fluctuations, recent losses and write-downs, restrictions in the
    Corporation's loan facility and dependence on key employees. Investors are
    cautioned that forward-looking statements are not guarantees of future
    performance and, accordingly, investors are cautioned not to put undue
    reliance on forward-looking statements due to the inherent uncertainty
    therein. Forward-looking statements are made as of the date of this Annual
    Information Form, or in the case of documents incorporated by reference
    herein, as of the date of such document, and the Corporation disclaims any
    intent or obligation to update publicly such forward-looking statements,
    whether as a result of new information, future events or results or
    otherwise.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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ANNUAL INFORMATION FORM
For the five months ended December 31, 2005 
Containing information as at March 31, 2006ITEM 1: CORPORATE STRUCTURE1.1 Name, Address and IncorporationGammon Lake Resources Inc. (the "Corporation") has a head
office located at 202 Brownlow Avenue, Cambridge 2, Suite 306, Dartmouth, Nova
Scotia, B3B 1T5. The registered office of the Corporation is located at 1, Place
Ville-Marie, Suite 3900, Montreal, Quebec, H3B 4M7.
The Corporation was incorporated under Part 1A of the Companies Act (Quebec) on February 25, 1986, under the name "Golden Rock
Explorations Inc." By Articles of Amendment dated April 17, 1998, the
Corporation changed its name to its current form of name, "Gammon Lake Resources
Inc.", and consolidated its common shares on a 15:1 basis.

1.2 Inter-corporate Relationships

The table below provides details with respect to the Corporation's direct and
indirect wholly-owned subsidiaries.

|Name of Subsidiary (1)        | Percentage of    | Jurisdiction of  | Nature of Business       
|----------------------------- | ---------------- | ---------------- | -------------------------
|                              | Securities Owned | Incorporation or |                          
|                              |                  | Organization     |                          
|Gammon Lake Resources         | 100% (direct)    | Barbados         | Holding corporation for  
|(Barbados) Inc. (2)           |                  |                  | Gammon Lake Mexico       
|Gammon Lake de Mexico S.A. de | 100% (indirect)  | Mexico           | Operating corporation for
|C.V. (3)                      |                  |                  | the Corporation's Mexican
|                              |                  |                  | properties               
|Gammon Lake (USA) Inc. (4)    | 100% (direct)    | Arizona          | Operating corporation for
|                              |                  |                  | United States office     
|                              |                  |                  | administrative matters.  

Notes:

> (1)

ITEM 2: GENERAL DEVELOPMENT OF THE BUSINESS

2.1

During the past three years, the Corporation has focused on
the exploration and development of its mineral interests (comprising a total of
44 mining concessions encompassing approximately 3,500 hectares) in the
municipality of Ocampo, in the State of Chihuahua, Mexico (collectively referred
to herein as the "Ocampo Project"). In February 2005, the Corporation assembled
a mine development and operations team to place the Ocampo Project into
production. On February 1, 2006, the Corporation poured its first dore bars from
the Ocampo Project. In the first year of production the Ocampo open pit mine is
expected to produce 136,735 ounces of gold and 3,979,826 ounces of silver,
equating to 203,065

1

---



gold equivalent ounces. Total first year commercial
production at Ocampo, including from underground operations is expected to
exceed 300,000 gold-equivalent ounces (190,000 ounces of gold and 6.6-million
ounces of silver). The Ocampo Project is described in this document under Item
3: Description of the Business.

In December 2002 and February 2004 the Corporation made
strategic investments in Mexgold Resources Inc., as described under "Item 3:
Description of the Business - 3.2 Mineral Projects - 3.2.2.Investment in Mexgold
Resources Inc.". In February 2006 the Corporation exercised 2,950 warrants to
acquire further Mexgold common shares for an aggregate exercise price of
$7,375,000. The Company's new position of 13,850,000 shares of Mexgold carries a
market value of approximately $99.9-million, versus Gammon Lake's total
investment cost of $19,675,000. The Corporation's investment in Mexgold is
described in this document under Item 3: Description of the Business.

During 2005, the Corporation changed its year end from July 31 to December
31. See Management's Discussion and Analysis.

On October 14, 2005, the Company secured a credit facility
with Scotia Capital Inc. The facility is secured and consists of a two-year
revolving facility of U.S. $40,000,000, and a three year revolving facility of
U.S. $20,000,000. Interest is payable at Prime Rate plus 1.25% or in the case of
US dollar advances, LIBOR + 2.25%. See Note 6 to the Corporation's audited
annual financial statements for the year ended December 31, 2004. In order to
preserve the Corporation's corporate budget for production start-up at the Ocampo Mine and fund the Mexgold warrant exercise, this credit facility was
increased to U.S. $67.5 million during the first quarter of 2006.

In the last three years the Corporation completed the following equity
financings:

- $110.0 million (January 2005);

$21.67 million
  (February 2004);

$17.25 million
  (August 2003);

$15.00 million
  (November 2003)

2.2 Significant Acquisitions

The Corporation has not completed any significant
acquisitions during the five months ended December 31, 2005. The Corporation's
primary focus at this time is on the exploration and development of the Ocampo
Project.

ITEM 3: DESCRIPTION OF THE BUSINESS

3.1

Uses of Gold

Product fabrication and bullion investment are the two principal uses of
gold. Within the fabrication category there are a wide variety of end uses, the
largest of which is the manufacture of jewellery (approximately 75% of
fabrication use). Other fabrication purposes include official coins,
electronics, miscellaneous industrial and decorative uses, dentistry, medals and
medallions. In addition, the world's Central Banks are maintaining gold
reserves, partly to back their respective currencies.

2

---



Sale and Refining

Gold can be readily sold on numerous markets throughout the world and it is
not difficult to ascertain its market price at any particular time. Since there
are a large number of available gold purchasers, the Corporation will not be
dependent upon the sale of gold to any one customer when it commences gold
production.

Employees

As at December 31, 2005, the Corporation had approximately 20 full time
employees.

Cycles

As a development stage corporation and an emerging producer of gold and
silver, the Corporation will be subject to the cyclical nature of gold, silver
and the metals markets generally.

3.1.1 The Ocampo Project

Mr. Jim McGlasson, P.Geo., Chief Geologist of the Corporation, is the
qualified person responsible for all technical data reported herein.

The Corporation is a mineral exploration and development
company engaged in the exploration for and development of gold and silver
deposits on its project (the "Ocampo Project") located in the Municipality of
Ocampo, State of Chihuahua, Mexico.

Kappes, Cassiday & Associates, Consulting Engineers ("KCA")
prepared a bankable feasibility study on the Ocampo Project. The bankable
feasibility study is dated November 29, 2004 and entitled "Ocampo, Chihuahua,
Underground and Surface Mines Mill and Heap Leach - Bankable Feasibility Study"
(the "KCA Report"). The executive summary of the KCA Report is reproduced below.
The full text of the KCA Report is available on the System for Electronic
Document Analysis and Retrieval (SEDAR) at www.sedar.com.

In February 2005, the Corporation assembled a mine
development and operations team to place the Ocampo Project into production,
with KCA appointed for mill and heap leach construction and commissioning.
Ground breaking for the construction of the open-pit mines and two surface
processing facilities began in early March 2005, with all underground and
open-pit mining equipment procured. The mill facilities for processing the
underground ore are now under construction. The refinery portion of the mill has
been completed and construction of the remaining mill components is proceeding
as per the construction schedule set out in the KCA Report.

In December 2005, the Corporation announced the completion of
an updated resource / reserve determination for the Ocampo which was prepared by
Mintec, inc. ("Mintec") of Tucson, Arizona. Based on revised mineralized ore
zones/veins using the additional information from new drilling and trenching by
the Corporation, the revised estimate calculated proven and probable reserves of
4,190,000 ounces of gold equivalent, measured and indicated resources of
5,097,000 ounces of gold equivalent, as well as an additional 5,687,000 ounces
of gold equivalent in the inferred category. This represents an 86% increase in
proven and probable reserves and a 68% increase in measured and indicated
resources from those developed for the KCA Report. prepared a written report
entitled "Gammon Lake Resources Inc. Ocampo Deposit Mineral Resources & Reserves
Technical Report - January 2006" (the "Mintec Report"). The summary from the
Mintec Report is reproduced below. The full text of the Mintec Report is
available on the System for Electronic Document Analysis and Retrieval (SEDAR)
at www.sedar.com.

3

---



On February 1, 2006, the Corporation poured its first dore
bars from the Ocampo Project. In the first year of production the Ocampo open
pit mine is expected to produce 136,735 ounces of gold and 3,979,826 ounces of
silver, equating to 203,065 gold equivalent ounces. Total first year commercial
production at Ocampo, including from underground operations is expected to
exceed 300,000 gold-equivalent ounces (190,000 ounces of gold and 6.6-million
ounces of silver).

In February 2006 the Corporation announced it had that it had
been awarded, through government lottery, an additional 6,000-hectares
surrounding Ocampo. The consolidation of this new mineral concession with Gammon
Lake's existing land holdings (44 concessions covering more than 3,500 hectares)
has resulted in the Corporation holding 100% control of approximately 10,000
hectares.

3.1.2 Summary of the KCA Technical Report

The following executive summary is reproduced from the KCA Report.

KAPPES, CASSIDAY AND ASSOCIATES

29 November 2004

GAMMON LAKE RESOURCES INC. 
OCAMPO GOLD/SILVER PROJECT

FEASIBILITY STUDY EXECUTIVE SUMMARY

This report presents an analysis of capital and operating
costs, and financial performance, for the Ocampo, Chihuahua, gold/silver project
of Gammon Lake Resources, Inc. The project will consist of an underground mine
with a 1,500 tonne/day agitated cyanide leach plant, and an open pit mine with
an 13,000 tonne/day heap leach. Gold accounts for about 60% of the recovered
value, and silver accounts for the balance. Project life is seven years based on
existing reserves, but development of known resources is expected to
significantly extend the life.

This report was prepared for Gammon Lake by Kappes, Cassiday
& Associates, but several significant sections of the report were prepared by
other independent consultants who are listed in section 2. The economic
conclusions of this feasibility study are presented in tables 1-1A and 1-1B.

Ocampo is an historic mining district, with recorded
production in the late 1800's of over 3,000,000 ounces of gold and 60,000,000
ounces silver. Gammon Lake has consolidated the entire district, and has
identified substantial undrilled exploration targets similar to the ones for
which ore reserves are presently known.

4

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TABLE 1-1A. Key Economic Parameters of the Ocampo Project



Table 1-1B. Gold and Silver Production from the Ocampo Project



(1) Total pre-production Capex is $104 million. Capex for the
operating units does not include other costs such as Administration Building,
Camp and Mess Hall, Laboratory, Warehouse, Mobile Equipment, Fencing, Potable
Water Distribution, Sewage Disposal, Power Supply and Distribution, Site
Preparation, Water Supply and Working Capital. Year zero underground
development, needed to develop the mine prior to production, is a continuation
of existing activities; these operating costs are not included within the
feasibility study budget. (2) Opex for the operating units does not include
other costs such as General and Administration, Geology and Engineering, Costs
of Bullion Sales, Camp and fuel tax. (3) Years 1 to 5; year 6 is end of
underground mine life and the mill does not operate the full year. (4) Years 1
to 6; year 7 is end of open pit mine life and the mine production is reduced.
(5) Diluted mine production grades.

The mineral deposits consist of quartz veins typically two
and a half to three meters wide in the underground areas, and 25 meters wide
(but at lesser grade) in the open pit areas. Veins typically dip at about 60-70
degrees. Ore occurs at the surface and in the deepest holes drilled so far,
covering a vertical extent of over 800 meters. The Mineral Resource used in this
study was developed in the recently completed Mineral Resource Estimate
Technical Report (Appendix XIX) prepared by Mintec of Tucson Arizona for Gammon
Lake, as presented in Tables 1-2, 1-3 and 1-4.

5

---



TABLE 1-2 Ocampo Project Underground Resource Estimate



TABLE 1-3 Ocampo Project Open Pit Resource Estimate (0.3 g/t
Cutoff)



TABLE 1-4 Ocampo Project Open Pit Resource Estimate (1.0 g/t
Cutoff)



(1) Determination based on USD $400 per ounce gold and USD $6.50 per ounce
silver for a ratio of 61.54 to 1.

The mineral reserves cited in tables 1-2 through 1-4 have
been converted into mineral reserves. John Thornton of Mintec, Inc., Independent
Qualified Person with regard to the ore resources and reserves, has performed
this analysis in regard to the open pit ores, and his results are presented in
sections 8-1 through 8-9. Table 1-5 below is a duplicate of table 8-12 in the
body of this study.

6

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Table 1-5 Ultimate Pit Reserve Summary



In regard to the underground ores, AST Mining Canada
developed a mining plan, including analysis of stope dilution and ore losses,
using Mine 2-4D software, which is an industry-accepted program for such
calculations. Their analysis, based on John Thornton's resource block model, is
presented in sections 8-10 and 8-11. Tables 1-6 is a duplicate of AST's table
8-16. Dan Kappes qualified person for this study, reviewed the methodology and
the level of detail which AST applied to their analysis, and he is comfortable
with their conclusion that the resource has now been converted to a reserve.

Table 1-6 Proven and Probable Reserves by Level (Northeast
Ocampo Underground Reserve)



Table 1-7 Summary of Proven and Probable Reserves



7

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In the open pit, the reserve consists of a continuous high
grade core, bordered by a halo of low grade material. Overall waste:ore ratio is
4.99:1. The cutoff between low grade ore and waste is gradational, and all
material placed on the heap will be economic.

In the underground mine, the reserve is being developed by
driving a downward ramp from surface. As each 60-meter level is reached, level
drifts are driven to and then along the veins. The initial underground mine will
produce from four intersecting, similar veins. At the time this report is being
prepared, the ramp has already been developed to three vertical levels (210
meters vertical depth) and the upper two levels have extensive development.
Development drives exist along Aventurero, San Juan, Las Animas, and San Jose.

Ore will be hauled from the stope areas to a production
shaft, and will then be hoisted to the surface. Waste will be hauled to surface
using trucks, or hoisted up the production shaft. The shaft collar is located
adjacent to the processing plant.

The underground mine will utilize shrinkage stoping for most
ore development. Veins average approximately 2.5 meters wide. Based on the
visual appearance of old stopes in the district plus evaluation of drill core,
the stopes will be fairly uniform in width, and will stand open over wide spans
for many years. The mine is developed on 60 meter vertical intervals
(approximately 70 meters stope height, since the veins are not vertical) using
footwall drifts in waste and horizontal draw-points (short drifts to the vein
from the footwall drift) on ten meter intervals. Within the stope, mining will
be done using jacklegs. All ore removal, hauling and transport will utilize
endloaders and trucks.

The conceptual mining method has been refined by practice,
since the underground mine has been in development for two years prior to
writing this study. Several stopes are partially developed, with the footwall
drift, the drawpoints, and the sill drifts (lower drifts along the vein) already
in place.

Both underground and surface ores are readily amenable to
processing by conventional precious metal cyanide leaching. Underground ore will
be processed in a conventional agitated leach plant with precipitation of
gold/silver using zinc dust (Merrill Crowe process). Open pit ore will be
crushed and heap leached. Heap leaching will yield substantially lower recovery
than milling, but since the heap leach ore is much lower grade, the overall cost
per ounce will be about the same in both processing scenarios.

Key financial indicators of the Ocampo project are presented in table 1-5.

Table 1-8. Key Financial Indicators for the Ocampo Mining and
Processing Operations



8

---



(1) Cash cost does not include capitalized annual underground development
costs, but these are included as costs when calculating the Net Annual Cash
Flow. (2) Years 1 to 5; in year 6 the underground mine is at end of mine life
and does not operate the full year. (3) Average over the 7 year mine life.

For calculating economic performance, the plant is
constructed in year zero, and year one is considered to be a full production
year. This should be achievable because some ore will be produced from the open
pit and stacked on the heap leach before the end of year zero, and the
underground mine should be fully developed and ready for production before the
end of year zero. The economic analysis is detailed in Section 19.0.

The robust economic projections demonstrate that Gammon Lake's 100% owned Ocampo Project has the potential to become a very successful gold and silver
mine.

3.1.3 Summary of the Mintec Report

The following summary is taken from the Mintec Report.

The revised mineral resources for the December 2005 technical submission
under NI 43-101 follows:

The updated resource calculation, as illustrated in the
tables below, contains 2.876-million gold ounces and 133.368-million silver
ounces in the measured and indicated categories and a further 2.950-million gold
ounces and 161.885-million silver ounces in the inferred category. On a
gold-equivalent basis, the updated resource at the Ocampo Project contains
approximately 5.097-million ounces in the measured and indicated categories and
5.687-million ounces in the inferred category.

Table 1.1 - Ocampo District Mineral Resource Summary

|Total Ocampo
    Mineral Resources
|----------------------------------
|                                  
|Project Area                      
|                                  
|                                  
|Northeast Area Measures           
|Open Pit Area Measured            
|Total Measured                    
|                                  
|Northeast Area Indicated          
|Open Pit Area Indicated           
|Total Indicated                   
|                                  
|Total Measured and Indicated      
|                                  
|Northeast Area Inferred           
|Open Pit Area Inferred            
|Total Inferred                    

The above was calculated using gold-equivalent cutoff grades
of 3.0 g/t for Northeast underground and 0.2 g/t for open-pit area.
Gold-equivalent values are based on 60 grams of silver = 1 gram of gold,
calculated on a gold price of US $450 and a silver price of US $7.50. Note also
that the numbers in the table may not tally perfectly due to rounding.

The proven and probable reserves of the open pit area are shown in the table
below.

9

---



Table 1.2 - PGR Open Pit Area Reserves

|                                                                      | Proven and Probable Reserves at the Open Pit Area
|--------------------------------------------------------------------- | -------------------------------------------------
|                                                                      |                                                  
|                                                                      |                                                  
|                                                                      | Gold (gpt)                                       
|                                                                     
|Proven Reserves                                                       |                                                  
|Low-Grade Open Pit                                                    | 0.24                                             
|High-Grade Open Pit                                                   | 1.73                                             
|                                                                     
|Probable Reserves                                                     |                                                  
|Low-Grade Open Pit                                                    | 0.22                                             
|High-Grade Open Pit                                                   | 1.73                                             
|                                                                     
|Total Proven and Probable                                             | 0.96                                             
|                                                                     
|Waste Material is 182,477,000
    tonnes at a Strip Ratio of 3.16 : 1

The potential incremental measured and indicated resources below the above
reserves are shown in the table below.

Table 1.3 - PGR Open Pit Area Incremental Resources

|Remaining Measured and
    Indicated Resource
|---------------------------------------------
|                                             
|                                             
|                                             
|                                             
|Measured                                     
|Indicated                                    
|Total Meas                                   

The proven and probable reserves for the
northeast and open pit areas are shown in the tables below.

Table 1.4 - Northeast Area Proven and Probable Reserves

|Northeast Project Proven &
    Probable Reserves
|------------------------------------------------
|                                                
|                                                
|                                                
|Proven Reserves                                 
|Northeast Underground                           
|Probable Reserves                               
|Northeast Underground                           
|                                                
|Total Northeast Underground                     

10

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Table 1.5 - Ocampo Proven and Probable Reserves

|Ocampo Proven &
    Probable Reserves
|-------------------------------------
|                                     
|Project Area                         
|                                     
|Northeast Area                       
|Open Pit Area High Grade             
|Open Pit Area Low Grade              
|                                     
|Total Ocampo                         

3.2 Project Description and Location

All concessions relating to the Ocampo Project are exploitation concessions.
The table below provides specific information about each of those concessions.

|Concession                      | Title # | Hectares | Expiry      | Mineral
    Agreements                    
|------------------------------- | ------- | -------- | ----------- | ------------------------------------------
|1 El Peñol                      | 214321  | 7.7817   | 5-Sep-2051  |                                           
|2 El Rayo                       | 160307  | 12.0000  | 22-Jul-2024 |                                           
|3 Santo Niño                    | 189284  | 19.3351  | 4-Dec-2040  |                                           
|4 La Resureccion                | 185243  | 37.5783  | 13-Dec-2039 |                                           
|5 La Escalera                   | 218971  | 19.0191  | 27-Jan-2053 |                                           
|6 Maria                         | 195211  | 8.5164   | 24-Aug-2042 |                                           
|7 La Gloria                     | 168685  | 108.0000 | 1-Jul-2031  |                                           
|8 San Amado                     | 147733  | 46.2774  | 17-May-2017 | Subject to the
    Minera Fuerte Agreement
|9 El Mastuerzo                  | 150528  | 9.0000   | 27-Oct-2018 | Subject to the
    Minera Fuerte Agreement
|10 Nuevo Jesus
    Maria y Jose | 151997  | 13.6916  | 11-Nov-2019 | Subject to the
    Minera Fuerte Agreement
|11 Cubrio                       | 153207  | 7.0274   | 29-Jul-2020 | Subject to the
    Minera Fuerte Agreement
|12 San Martin                   | 155698  | 17.3725  | 27-Oct-2021 | Subject to the
    Minera Fuerte Agreement
|13 El Rayo                      | 155697  | 20.7301  | 27-Oct-2021 | Subject to the
    Minera Fuerte Agreement
|14 Balvanera                    | 192789  | 6.4538   | 18-Dec-2041 | Subject to the
    Minera Fuerte Agreement
|15 Mirasol                      | 161866  | 10.0000  | 21-Jul-2025 |                                           
|16 La Fe                        | 212201  | 39.0000  | 21-Sep-2050 |                                           
|17 La Estrella                  | 147793  | 9.0000   | 27-Jun-2017 |                                           
|18 Santa Ana                    | 165663  | 14.2640  | 27-Nov-2029 |                                           
|19 El Porvenir                  | 212992  | 14.7819  | 21-Apr-2055 |                                           
|20 Alejandra                    | 213422  | 469.8785 | 21-Apr-2055 |                                           
|21 Alejandra Uno                | 213423  | 505.6717 | 21-Apr-2055 |                                           
|22 Alma Fracc. II               | 214374  | 0.9249   | 21-Apr-2055 |                                           
|22 Alma Fracc.
    III          | 214375  | 3.9967   | 21-Apr-2055 |                                           
|23 El Hueco                     | 189226  | 2.2141   | 4-Dec-2015  |                                           
|24 Santa Juiliana               | 170141  | 10.1014  | 16-Mar-2023 | Subject to the
    Soyopa Agreement       
|25 Rosario de Oro               | 170142  | 8.0000   | 16-Mar-2023 | Subject to the
    Soyopa Agreement       
|26 Belen                        | 170143  | 16.0000  | 16-Mar-2023 | Subject to the
    Soyopa Agreement       
|27 Lluvia de Oro                | 170144  | 100.0000 | 16-Mar-2023 | Subject to the
    Soyopa Agreement       
|28 San Ramon                    | 170145  | 16.0000  | 16-Mar-2023 | Subject to the
    Soyopa Agreement       
|29 Estanislao                   | 170146  | 5.6672   | 16-Mar-2023 | Subject to the
    Soyopa Agreement       
|30 Candelaria                   | 170147  | 3.9913   | 16-Mar-2023 | Subject to the
    Soyopa Agreement       

11

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|31 Altagracia                   | 170148       | 12.0000    | 16-Mar-2023 | Subject to the
    Soyopa Agreement
|------------------------------- | ------------ | ---------- | ----------- | -----------------------------------
|32 San Jose del
    Picacho     | 170149       | 4.5879     | 16-Mar-2023 | Subject to the
    Soyopa Agreement
|33 Matulera                     | 170150       | 9.4727     | 16-Mar-2023 | Subject to the
    Soyopa Agreement
|34 San Jose y San
    Juan      | 170151       | 24.7419    | 16-Mar-2023 | Subject to the
    Soyopa Agreement
|35 Belgrado                     | 170152       | 7.2818     | 16-Mar-2023 | Subject to the
    Soyopa Agreement
|36 Ampliacion de
    Altagracia | 170153       | 10.0000    | 16-Mar-2023 | Subject to the
    Soyopa Agreement
|37 Krystal                      | 204194       | 1657.9274  | 17-Dec-2046 | Subject to the
    Soyopa Agreement
|38 San Juan                     | 191736       | 53.9147    | 18-Dec-2041 | Subject to the
    Soyopa Agreement
|39 La Olvidada                  | 192048       | 105.0000   | 18-Dec-2041 | Subject to the
    Soyopa Agreement
|40 Buenos Aires                 | 212551       | 19.6711    | 30-Oct-2050 | Subject to the
    Soyopa Agreement
|41 Diez de Mayo                 | 213571       | 23.7893    | 21-Apr-2055 |                                    
|42 El Faro                      | 217082       | 4.4570     | 21-Apr-2055 |                                    
|42 Alejandra II                 | 213424       | 29.4358    | 21-Apr-2055 |                                    
|43 Arco Iris                    | EXP 16/33724 | 6,000.0000 |             |                                    
|44 Septentrion                  | EXP 16/33230 | 684.3912   |             |                                    
|44 Septentrion I                | EXP 16/33321 | 43.7229    |             |                                    
|                                | Total:       | 10252.6688 |             |                                    

3.3 Accessibility, Climate, Local Resources, Infrastructure and Physiography

Please refer to Section 5.0 of the Mintec Report, which Section is
incorporated herein by reference.

3.4 History

Please refer to Section 6.0 of the Mintec Report, which Section is
incorporated herein by reference.

3.5 Geologic Setting, Deposit Types and Mineralization

Please refer to Sections 7.0, 8.0 and 9.0 of the Mintec Report, which
Sections are incorporated herein by reference.

3.6 Exploration and Drilling

Please refer to Sections 10.0 and 11.0 of the Mintec Report, which Sections
are incorporated herein by reference.

3.7 Sampling and Analysis, Data Verification

Please refer to Sections 12.0, 13.0 and 14.0 of the Mintec Report, which
Sections are incorporated herein by reference.

3.8 Mineral Resource and Mineral Reserve Estimates

Please refer to Subsections 17.1, 17.7 and 17.8 of the Mintec Report, which
Subsections are incorporated herein by reference.

12

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3.9 Development and Mining Operations

The Ocampo Project consists of (i) an underground mine which
uses standard underground mining equipment and is designed to produce 1,500
tonnes of ore per day and (ii) an open pit mine with a 13,000 tonne per day heap
leach.

The Open Pit Mine

An open pit mine will occupy a portion of the Ocampo Project
for the purpose of exploiting six planned pits. Open Pit Mining will be
conducted using standard equipment. Haul truck capacity will be 100 tonnes with
the rest of the equipment being sized accordingly. Mining will use multiple
benching (6-meter or 9-meter bench heights) at least for the drilling and
blasting of waste. Selectivity may dictate excavation in 3-meter lifts (split
benching) in the ore areas. The sequence of activities will be as follows: (i)
clear and grub existing surface; (ii) drill and blast; (iii) load the haul
trucks using a front end loader working in combination with a bulldozer; (iv)
haul waste to waste dump, haul ore to primary crusher; and (v) dump ore directly
into the primary crusher, or into the stockpile if the crusher is undergoing
maintenance.

The Corporation has been developing 13-kilometres of pit
roads since June 2005 and has started stockpiled low-grade and high-grade ore.
As at late January 2006, approximately 40,000 tonnes of ore have been stacked on
the heap leach pad, and was under leach. The primary crusher, capable of
crushing up to 20,000 tonnes per day (7.0-million tonnes per year) is operating
and presently feeding a 6,000 tonne per day (2.1-million tonne per year)
high-grade secondary/tertiary crushing facility that was commissioned in early
January 2006.

Initial production is derived from the Conico deposit, one of
the six planned pits in the open pit area of the Ocampo Project. The Corporation
has been placing ore on the heap leach pad since early-January 2006,
building up to design capacity of 6,000 tonnes per day through the high-grade
circuit. The low-grade circuit was completed in 2006 and will process an
additional 7,000 tonnes of ore per day to the heap leach pads.

In the first year of production the Ocampo open pit mine is
expected to produce 136,735 ounces of gold and 3,979,826 ounces of silver,
equating to 203,065 gold equivalent ounces. Total first year commercial
production at Ocampo, including underground operations is expected to exceed
300,000 gold-equivalent ounces (190,000 ounces of gold and 6.6-million ounces of
silver).

The Underground Mine

Parameters used in the mine design were as follows: (i) 96%
gold recovery; (ii) 93% silver recovery; (iii) 3 grams/tonne eAu block resource
grade cut off for stope design; (iv) trackless mining equipment; (v) Decline-Rmp
personnel and equipment access; (vi) shaft hoisting of ore; (vii) mining method,
shrinkage stoping; (viii) preferred stope length of 60 linear meters; and (ix) a
two meter pillar left between stopes. The 3 grams/tonne was based upon a
preliminary underground mining and processing estimate of $27/tonne with
additional allowances for dilution of the in-situ resource grade.

The Northeast underground project area is know to have at
least 24 veins which have either a historic mine or prospect on them.
Construction of the underground mine was initiated in March 2003 to will exploit
ore from the Aventurero, Las Animas, San Juan and Rosario veins. The mine will
be operated using standard trackless underground mining equipment, and is
designed to produce 1,500 tonnes of ore per day. Ore will be hoisted to surface
via a shaft. The collar of the shaft is adjacent to the milling facility thus
reducing haulage costs. Waste rock from the development haulages and ramps will
be used as stope backfill wherever possible to minimize haulage costs.

13

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The project economics for the Ocampo Project (based upon the
7 year mine life based on reserves existing at the time of the KCA Report) are
described in Subparagraphs 16.1.1 and 16.1.2 of the KCA Report, which
Subparagraphs are incorporated herein by reference.

Mexican taxes applicable to the Ocampo Project are described in Section 16.9
of the KCA Report, which Section is incorporated herein by reference.

In addition to applicable taxes, to keep the Corporation's
exploration and exploitation concessions in good standing a minimum investment
or assessment work (MI) must be made each year and the work filed. The amount of
the MI varies based on the size, age and type of the concession. The MI required
changes each year with the Department of Mines publishing a new list at the
first of the year and it varies with the consumer price index. It is possible to
group concessions together and carry forward the excess work from previous
years. The current work programs coupled with the past work by the Corporation
should satisfy the minimum requirements for many years.

3.10 Property Agreements, Payments, Royalties and Other Encumbrances

Soypopa Agreement

The Soyopa Agreement dated March 1, 2000 and amended on
August 17, 2000, April 24, 2001 and November 24, 2001 (as amended, the "Soyopa
Agreement") outlines the terms for the Corporation to purchase certain
concessions (ie numbered 170141-170153, 191736, 192048, 204194 and 212551) from
Minerales de Soyopa, S.A. de C.V.

To date all of the terms of the Soyopa Agreement has been met and the only
the following terms are outstanding.

The Corporation is required to make an additional payment of
U.S. $7,000,000. This payment can be made in two separate installment with U.S.
$3,5000,000 to be paid on or before November 23, 2006 and the remaining U.S.
$3,500,000 to be paid on or before November 23, 2007 except if the property is
placed into production prior to November 23, 2006, in which case an annual
advance payment of U.S. $1,000,000 shall be made to Soyopa which will be
credited against the U.S. $7,000,000 obligation and, if the property is sold to
a third party, the balance of U.S. $7,000,000 shall be due and owing
immediately. The obligation to complete the payment of U.S. $7,000,000 is
secured by a charge registered on the mining concessions. In a related arm's
length agreement with Compania Minera Global S.A. de C.V. ("Minera Global")
dated July 17, 2000, pursuant to which consulting services were provided with
respect to the Soyopa Amending Agreements, a balance of U.S. $1,000,000 is due
to Minera Global upon the sale of the Ocampo Project.

Minera Fuerte Agreement

In January 6, 1999 the Corporation entered into a joint
venture agreement with Minera Fuerte Mayo, S.A. de C.V. (the "Minera Fuerte
Agreement") covering 17 concessions.This agreement was amended December
2, 1999 and March 5, 2001, and includes a related agreement with Compania Minera
Brenda, S.A. de C.V. dated February 21, 2003 (collectively, the "Minera Fuerte
Amending Agreements"). Ten of the concessions were bought outright and 7
concessions are subject to the terms of the February 21, 2003 Minera Fuerte
Amending Agreements which provides for a purchase (the "Minera Fuerte Buy-Out
Agreement"). With the Minera FuerteBuy-Out Agreement, Gammon Mexico acquired a
100% interest in the Minera Fuerte Agreement in consideration for the grant of
an 8% net profits royalty up to the maximum of U.S. $2,000,000. An additional
U.S. $250,000 is due if, as a result of exploration of the property, a minimum
mining reserve of two million ounces of equivalent gold is obtained, as
determined by an independent third party consulting firm of international repute
which is mutually acceptable to the

14

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parties thereto. In the event that the Corporation were to sell the property,
the full U.S. $2,000,000 becomes dues and payable at that time.

The concessions subject to this agreement are numbered 147733, 150528,
151997, 153207, 155697, 155698 and 192789.

The concessions are for mineral rights only and the
Corporation has secured the surface rights in the current areas of interest. On
March 20, 2002, Gammon Mexico and Minerales de Soyopa, S.A. de C.V. ("Soyopa")
entered into a surface rights lease with the Common Land (Ejido) Commissariat
covering the mining concessions of Gammon Mexico and Soyopa. This agreement
covers approximately 2000 hectares. The agreement is for 30 years for the
initial and only payment of U.S. $20,000. The agreement has been registered with
the National Agrarian Registry.

It should be noted that some small concessions, held by
others, exist within the Corporation's concession blocks. These concessions are
not in areas of significant mineralization and are not expected to materially
and adversely impact the Ocampo Project.

3.11 Investment in Mexgold Resources Inc.

In December 2002, the Corporation made a strategic investment
by acquiring 5.0 million shares of Mexgold Resources Inc. ("Mexgold") for a
purchase price of $500,000 ($0.10 per share). Mexgold is a junior gold and
silver mining company engaged in acquiring, exploring and developing precious
metals projects in Mexico. Subsequent to making this investment, Mexgold
completed a reverse take-over transaction whereupon its common shares were
listed for trading on the TSX Venture Exchange under the trading symbol, "MGR".
Pursuant to an agreement with Mexgold, these shares must be held until August
20, 2009, and there will be no sale, transfer, assignment, pledge, encumbrance,
grant of a security interest in or other form of conveyance of these shares,
directly, indirectly or beneficially, prior to that time unless Mexgold so
consents in writing thereto.

Mexgold holds a 100% ownership of five mining concessions
encompassing the Guadalupe y Calvo gold/silver property. The Guadalupe y Calvo
gold/silver project is located in the Sierra Madres in the state of Chihuahua,
Mexico, approximately 300 kilometers southwest of the city of Chihuahua and 200
kilometers west of the city of Hidalgo de Parral.

On February 26, 2004, the Corporation invested a further
$11.8 million into Mexgold Resources Inc. to maintain its 25% interest in
Mexgold. This investment was part of a Mexgold private placement financing
consisting of the sale of 22.5 million subscription receipts (the "Subscription
Receipts") at a price of $2.00 per Subscription Receipt for gross proceeds of
$45,000,000. Each Subscription Receipt represented the right to receive one Unit
upon completion of the acquisition of the El Cubo Gold-Silver Mine. Each Unit
consists of one common share of Mexgold and one-half of one common share
purchase warrant. Each whole warrant entitles the holder to acquire one common
share at a price of $2.50 per share until February 26, 2006. The Corporation
acquired 5.9 million Subscription Receipts out of the total financing for a
total purchase price of $11.8 million on the same basis as all the other
investors in the financing.

On March 5, 2004, Mexgold acquired the El Cubo Gold-Silver
Mine in Guanajuato State, Mexico. The El Cubo Gold-Silver Mine is located in the
Guanajuato gold-silver district in the Republic of Mexico, near the City of
Guanajuato in Guanajuato State. Pursuant to the terms of the Subscription
Receipts, the Subscription Receipts were deemed to have been exercised as at
5:00 p.m. (Toronto time) on March 15, 2004, and the common shares and warrants
of Mexgold underlying the Subscription Receipts were issued to the holders of
the Subscription Receipts.

15

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On October 12, 2004, Mexgold entered into a lease agreement
with a subsidiary of Industrias Peñoles, S.A. de C.V., for the Las Torres Mine,
immediately adjacent to the El Cubo Mine. The Las Torres Mine comprises a group
of four working mines, consisting of the Cedros, Peregrina, Apolo and Sirena
mines. Each of these mines has been maintained on a care and maintenance basis,
and no special measures are required to resume operations. Pursuant to the Las
Torres lease, Mexgold has the right to explore, develop and mine the Las Torres
property for a period of 5 years, with the right to renew for a further five
year period. Annual lease payments total US $480,000 in the first year, and US
$720,000 each year thereafter. In addition, Mexgold is required to pay a 3.5%
net smelter return on all gold and silver sales equal to or above US $350 per
ounce gold and US $5.50 per ounce silver. The Peñoles agreement also includes
use of the Las Torres mill complex, a modern, fully functional 2,200 tpd
hoisting, grinding and flotation processing facility, with an estimated
replacement cost of US $17-million.

In February 2005, Mexgold reported significant results from
exploration work at the company's El Cubo Gold-Silver Mine in Guanajuato,
Mexico. Channel sampling in a new area of exploration in the mine has resulted
in the discovery of a new gold-silver zone. Sampling conducted along a length of
38 meters returned average grades of 70.9 grams per tonne gold and 505 grams per
tonne silver, over average widths of 4.3 meters. This translates to an average
gold equivalent grade of 78.7 grams per tonne. Furthermore, these grades
occurred within a 76 meter length with average grades of 45.1 grams per tonne
gold and 311 grams per tonne silver, for a gold equivalent grade of 49.9 grams
per tonne, over average widths of 4.0 meters. Gold equivalent grades are based
on 65 grams of silver = 1 gram of gold, calculated on a gold price of US$400 and
a silver price of US $6.15.

In August 2005, Mexgold reported the results from 54 new
exploration drill holes completed at the El Cubo - Las Torres Mine complex and
the Guadalupe y Calvo Project. A total of 46 new holes were drilled at the El
Cubo - Las Torres Mine complex producing 41 intercepts above an underground cut
off grade of 3 grams per tonne gold equivalent, and a 0.25 gram per tonne gold
equivalent cut off grade for potential bulk tonnage targets. Significant results
include hole C-287, drilled on the Anabel structure, intersecting 99.43 grams
per tonne gold and 942 grams per tonne silver, for a gold equivalent grade of
113.9 grams per tonne, over 1.8 meters. This was included in a larger interval
of 10 meters grading 15.84 grams per tonne gold and 280 grams per tonne silver.
Hole C-302, drilled on the Marmajas structure, encountered mineralization from
surface to a depth of 3.3 meters grading 59.20 grams per tonne gold and 1,345
grams per tonne silver, for a gold equivalent grade of 79.9 grams per tonne.

February 26, 2006 as part of the exercise of the Mexgold
warrants by all of the Mexgold warrant holders, Gammon Lake exercised the
2,950,000 Mexgold warrants it held for total proceeds of $7,375,000. The
exercise of these warrants has allowed Gammon Lake to maintain its pro rata
share ownership of Mexgold. The Company's new position of 13,850,000 shares of Mexgold carries a market value of approximately $99.9-million, versus Gammon
Lake's total investment cost of $19,675,000. In order to preserve Gammon Lake's
corporate budget for production start-up at the Ocampo Mine and fund the Mexgold
warrant exercise, Gammon Lake's U.S. $60 million credit facility with the Bank
of Nova Scotia was increased to U.S. $67.5 million, on the same terms as earlier
announced (See Gammon Lake's press release #12-2005, dated October 20, 2005).
Gammon Lake now owns a total of 13,850,000 common shares of Mexgold representing
23.1% of Mexgold's issued and outstanding shares on a non-diluted basis.

Mexgold and the Corporation have certain common directors and
officers. Mr. Jim McGlasson, P.Geo., Chief Geologist of the Corporation, is the
qualified person responsible for all technical data reported herein regarding
Mexgold Resources Inc.

16

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3.12 Risk Factors

An investment in the securities of the Corporation is
speculative and involves numerous and significant risks and should be undertaken
only by purchasers whose financial resources are sufficient to enable them to
assume such risks and who have no need for immediate liquidity in their
investment. Prospective investors should carefully consider the risk factors
described below.

3.12.1 No History of Profitability

The Corporation is a development stage company with no
history of profitability. There can be no assurance that the operations of the
Corporation will be profitable in the future. The Corporation has limited
financial resources and will require additional financing to further explore,
develop, acquire, retain and engage in commercial production on its property
interests and, if financing is unavailable for any reason, the Corporation may
become unable to acquire and retain its mineral concessions and carry out its
business plan.

3.12.2 Exploration and Development Stage Corporation

The Corporation is engaged in the business of exploration and
development of the Ocampo Project in the hope of locating economic deposits of
minerals. The property interests of the Corporation are in the exploration and
development stage only. Although a commercial body of ore has been identified on
the Ocampo Project, there is no assurance that it can be mined profitably.
Accordingly, it is not assured that the Corporation will realize any profits in
the short to medium term. Any profitability in the future from the business of
the Corporation will be dependent upon developing and commercially mining an
economic deposit of minerals, which itself is subject to numerous risk factors.
The exploration and development of mineral deposits involve a high degree of
financial risk over a significant period of time of which even a combination of
careful evaluation, experience and knowledge of management may not eliminate.
While discovery of additional ore-bearing structures may result in substantial
rewards, few properties which are explored are ultimately developed into
producing mines. Major expenses may be required to establish reserves by
drilling and to construct mining and processing facilities at a particular site.
It is impossible to ensure that the current exploration and development programs
of the Corporation will result in profitable commercial mining operations. The
profitability of the Corporation's operations will be, in part, directly related
to the cost and success of its exploration and development programs which may be
affected by a number of factors. Substantial expenditures are required to
establish reserves which are sufficient to commercially mine some of the
Corporation's properties and to construct, complete and install mining and
processing facilities in those properties that are actually mined and developed.

3.12.3 Foreign Operations

All of the Corporation's property interests are located in
the State of Chihuahua, Mexico, and are subject to that jurisdiction's laws and
regulations. The Corporation believes the present attitude of Mexico and the
State of Chihuahua to foreign investment and mining to be favourable but
investors should assess the political risks of investing in a foreign country.
Any variation from the current regulatory, economic and political climate could
have an adverse effect on the affairs of the Corporation.

3.12.4 Government Regulations

The Corporation's exploration operations are subject to
government legislation, policies and controls relating to prospecting,
development, production, environmental protection, mining taxes and labour
standards. In order for the Corporation to carry out its mining activities, the
Corporation's exploitation licences must be kept current. There is no guarantee
that the Corporation's exploitation licences will be extended or that new
exploitation licences will be granted. In addition, such exploitation licences
could

17

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be changed and there can be no assurances that any
application to renew any existing licences will be approved. The Corporation may
be required to contribute to the cost of providing the required infrastructure
to facilitate the development of its properties. The Corporation will also have
to obtain and comply with permits and licences which may contain specific
conditions concerning operating procedures, water use, waste disposal, spills,
environmental studies, abandonment and restoration plans and financial
assurances. There can be no assurance that the Corporation will be able to
comply with any such conditions.

3.12.5 Market Fluctuation and Commercial Quantities

The market for minerals is influenced by many factors beyond
the control of the Corporation such as changing production costs, the supply and
demand for minerals, the rate of inflation, the inventory of mineral producing
corporations, the international economic and political environment, changes in
international investment patterns, global or regional consumption patterns,
costs of substitutes, currency availability and exchange rates, interest rates,
speculative activities in connection with minerals, and increased production due
to improved mining and production methods. The metals industry in general is
intensely competitive and there is no assurance that, even if commercial
quantities and qualities of metals are discovered, a market will exist for the
profitable sale of such metals. Commercial viability of precious and base metals
and other mineral deposits may be affected by other factors that are beyond the
Corporation's control including particular attributes of the deposit such as its
size, quantity and quality, the cost of mining and processing, proximity to
infrastructure and the availability of transportation and sources of energy,
financing, government legislation and regulations including those relating to
prices, taxes, royalties, land tenure, land use, import and export restrictions,
exchange controls, restrictions on production, as well as environmental
protection. It is impossible to assess with certainty the impact of various
factors which may affect commercial viability so that any adverse combination of
such factors may result in the Corporation not receiving an adequate return on
invested capital.

3.12.6 Mining Risks and Insurance

The Corporation is subject to risks normally encountered in
the mining industry, such as unusual or unexpected geological formations,
cave-ins or flooding. The Corporation may become subject to liability for
pollution, damage to life or property and other hazards of mineral exploration
against which it or the operator if its exploration programs cannot insure or
against which it or such operator may elect not to insure because of high
premium costs or other reasons. Payment of such liabilities would reduce funds
available for acquisition of mineral prospects or exploration and development
and would have a material adverse affect on the financial position of the
Corporation.

3.12.7 Environmental Protection

The mining and mineral processing industries are subject to
extensive governmental regulations for the protection of the environment,
including regulations relating to air and water quality, mine reclamation, solid
and hazardous waste handling and disposal and the promotion of occupational
health and safety which may adversely affect the Corporation or require it to
expend significant funds.

3.12.8 Capital Investment

The ability of the Corporation to continue exploration and
development of its property interests will be dependent upon its ability to
raise significant additional financing hereafter. There is no assurance that
adequate financing will be available to the Corporation or that the terms of
such financing will be favourable. Should the Corporation not be able to obtain
such financing, its properties may be lost entirely. A summary of the
Corporation's financial commitments under the Corporation's option and

18

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joint venture agreements is provided in the following table. Also refer to
"Item 3: Description of Business".

|Agreement                                 | Consideration          | Terms                                                
|----------------------------------------- | ---------------------- | -----------------------------------------------------
|                                          |                        |                                                      
|Minera Fuerte Joint Venture
    Agreement | 8% Net Profit Interest | U.S. $2,000,000 less any net
    profit royalty      
|                                          | up to a maximum of     | payments made is due and
    payable upon sale of the
|                                          | U.S. $2,000,000        | property                                             
|                                          |                        |                                                      
|                                          |                        | Upon establishment of a mining
    reserve of 2.0    
|                                          | U.S. $250,000          | million ounces of gold and
    gold-equivalent ounces
|                                          |                        |                                                      
|Soyopa Joint Venture Agreement            | U.S. $3,500,000        | On or before November 23, 2006.                      
|                                          |                        |                                                      
|                                          | U.S. $3,500,000        | On or before November 23, 2007.                      
|                                          |                        |                                                      
|                                          | U.S. $1,000,000        | Upon sale of Ocampo Project to
    a third party.    

3.12.9 Conflicts of Interest

Certain of the directors and officers of the Corporation also
serve as directors of Mexgold Resources Inc. and other companies involved in
natural resource exploration and development and consequently, the possibility
of conflict exists. The Corporation's investment in Mexgold Resources Inc. is
described in, "Item 3: Description of the Business - 3.11 Investment in Mexgold
Resources Inc.". Any decisions made by such directors involving the Corporation
will be made in accordance with the duties and obligations of directors to deal
fairly and in good faith with the Corporation and such other companies. In
addition, such directors declare, and refrain from voting on any matters in
which such directors may have a conflict of interest.

3.12.10 Dependence on Key Personnel

The success of the Corporation is heavily dependent on its
key personnel and on its ability to motivate, retain and attract highly skilled
persons. The competition for qualified personnel is strong. The Corporation
considers Messrs. Fred George and Bradley H. Langille to be key employees and
maintains life insurance in the amount of $1,000,000 on the lives of each of
these officers. In order to attract and retain its key personnel, the
Corporation has sought to provide its personnel with challenging work and a
variety of opportunities for advancement through growth and expansion of the
Corporation's business, and through equity participation.

3.12.11 Lack of Active Market

There can be no assurance that an active market for the
common shares of the Corporation will continue and any increased demand to buy
or sell the common shares of the Corporation can create volatility in price and
volume.

3.12.12 Currency

The Corporation carries on its exploration activity outside
of Canada. Accordingly, it is subject to the risks associated with the
fluctuation of the rate of exchange of the Canadian dollar and foreign
currencies, in particular the Mexican peso, the currency of Mexico, and the
United States dollar. Such fluctuations may materially affect the Corporation's
financial position and results.

19

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3.12.13 Dividends

To date, the Corporation has paid no dividends on its Common Shares and does
not intend to pay dividends on its Common Shares in the foreseeable future. See
"Item 4: Dividends".

3.12.14 Competition

The international mining industry is subject to government
controls and regulations which may vary from time to time. The industry is
highly competitive in all phases. The Corporation competes with numerous other
companies and individuals in the search for and the acquisition of attractive
mineral properties. The Corporation's ability to acquire properties and
potential reserves in the future will depend not only on its ability to develop
its present properties, but also on its ability to select and acquire suitable
producing properties or prospects for mineral exploration. The Corporation will
also be required to compete in the future directly with other companies that may
have greater resources.

3.12.15 Possible PFIC Status

Shareholders who are U.S. taxpayers should be aware that the
Corporation may be a passive foreign investment company ("PFIC") for the current
fiscal year; and may have been a PFIC in prior years or may become a PFIC in the
future. If the Corporation is a PFIC for any year during a U.S. taxpayer's
holding period, then such U.S. taxpayer, generally, will be required to treat
any so called "excess distribution" received on its common shares, or any gain
realized upon a disposition of common shares, as ordinary income and to pay an
interest charge on a portion of such distribution or gain, unless the taxpayer
makes a qualified electing fund ("QEF") election or a mark-to-market election
with respect to the shares of the Corporation. In certain circumstances, the sum
of the tax and the interest charge may exceed the amount of the excess
distribution received, or the amount of proceeds of disposition realized, by the
taxpayer. There can be no assurance that the Corporation will satisfy such
information reporting requirements or the related record keeping requirements. A
U.S. taxpayer who makes a QEF election generally must report on a current basis
its share of the Corporation's net capital gain and ordinary earnings for any
year in which the Corporation is a PFIC, whether or not the Corporation
distributes any amounts to its shareholders. A U.S. taxpayer who makes the
mark-to-market election, generally, must include as ordinary income in each
year, the excess of the fair market value of the common shares over the
taxpayer's tax basis therein.

ITEM 4: DIVIDENDS

The Corporation has not declared or paid any dividends on its
Common Shares since the date of its incorporation. The Corporation intends to
retain its earnings, if any, to finance the growth and development of its
business and does not expect to pay dividends or make any other distributions in
the near future. The Corporation's board of directors will review this policy
from time to time having regard to the Corporation's financing requirements,
financial condition and other factors considered to be relevant.

20

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ITEM 5: DESCRIPTION OF CAPITAL STRUCTURE

5.1 General

The Corporation's authorized capital consists of an unlimited
number of common shares without nominal or par value, an unlimited number of
Class A preferred shares and an unlimited number of Class B preferred shares. A
total of 79,130,724 common shares are issued and outstanding as at the date of
this annual information form. There are no Class A or Class B preferred shares
currently outstanding.

5.2 Common Shares

Each common share ranks equally with all other common shares
with respect to dissolution, liquidation or winding-up of the Corporation and
payment of dividends. The holders of common shares are entitled to one vote for
each share of record on all matters to be voted on by such holders and are
entitled to receive pro rata such dividends as may be declared by the board of
directors of the Corporation out of funds legally available therefor and to
receive pro rata the remaining property of the Corporation on dissolution. The
holders of common shares have no pre-emptive or conversion rights. The rights
attaching to the common shares can only be modified by the affirmative vote of
at least two-thirds of the votes cast at a meeting of shareholders called for
that purpose.

5.3 Class A and Class B Preferred Shares

The Class A and Class B preferred shares are non-cumulative,
non-participating, non-voting and redeemable at their paid-in value. Dividends
on the Class A and Class B preferred shares are determined by the board of
directors and are not to exceed 12% in the case of the Class A preferred shares
and 13% in the case of the Class B preferred shares. The Class A and Class B
preferred shares are entitled to preference over the Common Shares and any other
shares of the Corporation ranking junior to the Class A and Class B preferred
shares with respect to the payment of dividends and the distribution of assets
in the event of liquidation, dissolution or winding-up of the Corporation. Any
amendment to the articles of the Corporation to vary any rights, privileges,
restrictions or conditions attaching to the Class A or Class B preferred shares
must, in addition to authorization by special resolution, be authorized by at
least two-thirds of the votes cast at a meeting of holders of Class A or Class B
preferred shares duly called for such purpose, each holder being entitled to one
vote for each preferred share held.

ITEM 6: MARKET FOR SECURITIES

6.1 Trading Price and Volume

The Common Shares of the Corporation have been listed and
posted for trading on the Toronto Stock Exchange (the "TSX") since February 18,
2000, under the trading symbol "GAM". The Common Shares of the Corporation have
been listed and posted for trading on the American Stock Exchange since
September 4, 2003, under the trading symbol "GRS". The following table sets
forth the high and low trading prices and trading volume of the Common Shares as
reported by the TSX for the periods indicated:

21

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|Period             | High (C$) | Low (C$) | Volume    
|------------------ | --------- | -------- | ----------
|March 1 - 28, 2006 | 21.24     | 17.60    | 8,564,430 
|February, 2006     | 20.04     | 15.63    | 12,227,872
|January, 2006      | 16.70     | 13.31    | 10,124,136
|December, 2005     | 14.25     | 10.20    | 11,747,681
|November, 2005     | 10.49     | 8.91     | 3,343,755 
|October, 2005      | 9.69      | 8.40     | 3,727,307 
|September 2005     | 9.86      | 8.90     | 2,770,137 
|August 2005        | 9.30      | 8.31     | 2,473,916 
|July 2005          | 8.49      | 7.90     | 1,926,977 
|June 2005          | 8.89      | 7.50     | 6,125,367 
|May 2005           | 7.93      | 6.79     | 2,230,605 
|April 2005         | 8.95      | 7.05     | 6,409,288 
|March 2005         | 7.72      | 6.60     | 3,973,972 
|February 2005      | 7.10      | 5.76     | 5,592,536 
|January 2005       | 6.57      | 5.87     | 1,726,166 

6.2 Prior Sales

There have been no prior sales of securities of the Corporation during the
five months ended December 31, 2005 and to the date of this Annual Information
Form.

ITEM 7: ESCROWED SECURITIES

To the knowledge of the Corporation, there are no securities of the
Corporation which are held in escrow.

ITEM 8: DIRECTORS AND OFFICERS

The management of the Corporation consists of four (4)
executive officers and eight (8) directors. The table presented below provides
the names of and related information concerning each executive officer and
director. Each director holds office until the close of the next annual meeting
of shareholders or until his successor is duly elected or appointed.

22

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|                                        |                             |               |              
|--------------------------------------- | --------------------------- | ------------- | -------------
|Name, Position with the
    Corporation | Director/Officer Since      | Common Shares | Stock Options
|and/or Principal Occupation             |                             |               |              
|Fred George                             | Director and Officer of the | 1,134,400 (5) | 3,417,200    
|Bedford, Nova Scotia                    | Corporation and its         |               |              
|Chairman and President                  | predecessor companies since |               |              
|                                        | 1996                        |               |              
|Bradley H. Langille (4)                 | Director and Officer of the | 1,361,800 (6) | 2,718,800    
|Halifax, Nova Scotia                    | Corporation and its         |               |              
|Chief Executive Officer                 | predecessor companies since |               |              
|                                        | 1996                        |               |              
|Colin P. Sutherland, C.A.,
    C.F.P.   | Director and Officer since  | 2,000         | 125,000      
|Hammonds Plains, Nova Scotia            | 2004                        |               |              
|Chief Financial Officer                 |                             |               |              
|John C. Thornton                        | Officer since 2005          | 76,900        | 100,000      
|Tucson, Arizona                         |                             |               |              
|Chief Operating Officer                 |                             |               |              
|Gregory K. Liller                       | Officer since 2004          | 4,500         | 270,000      
|Tucson, Arizona                         |                             |               |              
|Vice-President, Exploration             |                             |               |              
|Alejandro Caraveo(4)                    | Director since 2002         | nil           | nil          
|Chihuahua City, Mexico                  |                             |               |              
|President, Compania Tecnica
    Minera, |                             |               |              
|S.A. de C.V.                            |                             |               |              
|Dale M. Hendrick (1)(2)(4)              | Director since 2000         | nil           | 5,000        
|Toronto, Ontario                        |                             |               |              
|President, Dale M. Hendrick &           |                             |               |              
|Associates Inc.                         |                             |               |              
|Kent L. Noseworthy (1)(2)(3)            | Director since 2005         | nil           | 10,000       
|Halifax, Nova Scotia                    |                             |               |              
|Barrister & Solicitor                   |                             |               |              
|Frank Conte (1)(2)(3)                   | Director since 2005         | nil           | 10,000       
|Eastern Passage, Nova Scotia            |                             |               |              
|Retired Executive                       |                             |               |              
|Canek Rangel (1)(3)                     | Director since 2005         | nil           | 5,000(7)     
|Mexico City, Mexico                     |                             |               |              
|Mining Engineer                         |                             |               |              

Notes:

> (1) Member of the Audit
>   Committee. See "Item 15: Audit Committee Information".
>   (2) Member of the Nominating and
>   Corporate Governance Committee.
>   (3) Member of the Compensation
>   Committee.
>   (4) Member of the Occupational
>   Health and Safety Committee
>   (5) Represents approximately 1%
>   of the outstanding Common Shares of the Corporation
>   (6) Represents approximately 2%
>   of the outstanding Common Shares of the Corporation
>   (7) A portion of the above-noted
>   options held by Directors and Senior Officers are subject to shareholder
>   approval: Canek Rangel.

Each of the directors and officers has had the principal occupation listed
under his name above for the last five years.

As at the date of this annual information circular, the directors and senior
officers of the Corporation, as a group, beneficially own, directly or
indirectly, or exercise control or direction over an aggregate of 2,579,600
Common Shares (9,246,600 Common Shares if all options held by them are
exercised), representing 3.3% of the currently outstanding Common Shares (11.7%
of the Common Shares on a fully diluted basis)

23

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ITEM 9: LEGAL PROCEEDINGS

There are no legal proceedings involving the Corporation or its property as
at the date of this annual information form and, to the best knowledge of
management, no such proceedings are contemplated.

ITEM 10: INTEREST OF MANAGEMENT & OTHERS IN MATERIAL TRANSACTIONS

No director, senior officer, principal holder of securities
or any associate or affiliate thereof of the Corporation has any interest,
directly or indirectly, in material transactions with the Corporation or any of
its direct or indirect wholly-owned subsidiaries, other than the following
transactions, which were in the normal course of operations:

During the five months ended December 31, 2005, the
Corporation paid a total of $5,002,885(twelve months ended - $4,670,871) to
companies controlled by directors of the Corporation for management fees,
mineral property exploration expenditures, promotional fees and professional
fees, as follows:

|                                              | Five months ended | Twelve months ended
|--------------------------------------------- | ----------------- | -------------------
|                                              | December 31, 2005 | July 31, 2005      
|                                              | ($)               | ($)                
|Management Fees                               | 171,237           | 278,440            
|Mineral Property Exploration
    Expenditures | 4,831,618         | 4,392,431          
|Professional Fees                             | -                 | -                  
|Total                                         | 5,002,885         | 4,670,871          

Management believes that related party transactions for management,
professional fees and mineral property exploration are recorded at fair market
value.

Commencing in the 2004 period, the Corporation has retained mineral
exploration and mining contracting services through a company owned by a related
party of a director of the Corporation. As at December 31, 2005 these non-arm's
length mineral exploration expenditures totalled $4,831,618 (July 31, 2005 -
$4,392,431), as noted above. These expenditures are recorded at fair value
calculated at cost plus 10%. The Corporation believes that this arrangement
gives the Corporation better quality and control for mineral exploration and
mining contracting services than it could otherwise receive through third party
independent contractors.

As at December 31, 2005, the Corporation had bonuses payable to Officers in
the amount of $373,876 (July 31, 2005 - $225,000); Directors and officers of the
Corporation are entitled to hold management incentive stock options. For this
purpose, the Corporation has adopted a Stock Option Plan for directors,
officers, employees and consultants of the Corporation and its subsidiaries. The
purpose of the Stock Option Plan is to encourage ownership of the Corporation's
common shares by the persons who are primarily responsible for the management
and profitable growth of the Corporation's business, as well as provide
additional incentive for superior performance by such persons and attract and
retain valued personnel. The plan provides that eligible persons thereunder
include any director, senior officer, consultant or employee of the Corporation.
A consultant is defined as an individual that is engaged by the Corporation,
under a written contract, to provide services on an ongoing basis and spends a
significant amount of time on the Corporation's business and affairs. The
definition of consultant also includes an individual whose services are engaged
through a personal holding corporation.

In general, see "Item 3: Description of the Business - 3.12 Risk Factors
-
3.12.9. Conflicts of Interest".

24

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ITEM 11: TRANSFER AGENT AND REGISTRAR

The Corporation's transfer agent and registrar is Computershare Trust Company of Canada ("Computershare"). Computershare's
register of transfers for the Corporation's Common Shares is located at 1500
University Street, Suite 700, Montreal, Quebec, H3A 3S8.

ITEM 12: MATERIAL CONTRACTS

Except as disclosed in this annual information form, and for
contracts entered into in the ordinary course of business, the Corporation has
not entered into any material contracts for the five months ended December 31,
2005, and to the date of this annual information form.

ITEM 13: INTERESTS OF EXPERTS

The following persons and companies have prepared or certified a statement,
report or valuation on behalf of the Corporation as follows during the five
months ended December 31, 2005, and to the date of this Annual Information Form:
(i) KPMG, LLP, Chartered Accountants, prepared an audit report as auditors of
the Corporation, in connection with the audit of the company's annual financial
statements for the year ended December 31, 2005 the auditors confirmed that they
are independent within the meaning of the Rules of Professional Conduct of the
Institute of Chartered Accountants of Nova Scotia; (ii) Kappes, Cassiday &
Associates, Consulting Geologists, prepared a report dated November 29, 2004,
entitled "Ocampo, Chihuahua, Underground and Surface Mines Mill and Heap Leach
-
Bankable Feasibility Study" (the "KCA Report"); and (iii) Mintec, Inc.
Consulting Geologists, prepared a report dated January 2006, entitled "Gammon
Lake Resources Inc. Ocampo Deposit Mineral Resources and Reserves Technical
Report - January 2006".

None of the above-noted persons or companies hold a registered or beneficial
interest, direct or indirect, in any securities or other property of the
Corporation and its associates and affiliates.

ITEM 14: AUDIT COMMITTEE INFORMATION

Overview

The Audit Committee of the Corporation's Board of Directors is principally
responsible for:

> a) recommending
>   to the Corporation's Board of Directors the external auditor to be nominated
>   for election by the Corporation's shareholders at each Annual Meeting and
>   negotiating the compensation of such external auditor;
>   b) overseeing the work of the
>   external auditor;
>   c) reviewing the
>   Corporation's annual and interim financial statements, Management's Discussion
>   and Analysis and press releases regarding earnings before they are reviewed
>   and approved by the Board of Directors and publicly disseminated by the
>   Corporation; and

25

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> d) reviewing the
>   Corporation's financial reporting procedures to ensure adequate procedures are
>   in place for the Corporation's public disclosure of financial information
>   extracted or derived from its financial statements, other than disclosure
>   described in the previous paragraph.

During fiscal 2005, the Audit Committee met four (4) times.

The purposes of the Audit Committee are to assist the Board of Directors'
oversight of:

- the integrity of Gammon's financial statements;
- Gammon's compliance with legal and regulatory requirements;
- the risk management policies of management;
- the qualifications and independence of Gammon's independent auditors; and
- the performance of the independent auditors and Gammon's internal audit
  function.

In accordance with National Instrument 52-110, Audit
Committees ("MI 52-110"), disclosure of audit fees and other matters related to
the composition and operation of the Corporation's Audit Committee is found in
this Information Circular and the 2005 Annual Information Form of the
Corporation filed on www.sedar.com.

The Audit Committee's Charter

The Corporation's Board of Directors has adopted a Charter for the Audit
Committee, which sets out the Committee's mandate, organization, powers and
responsibilities. The complete Charter is attached as Schedule "A" to this
Annual Information Form.

Composition of the Audit Committee

The members of the Audit Committee are Dale Hendrick (Chair),
Frank Conte, Kent L. Noseworthy, Canek Rangel. All of the members of the Board
of Directors are independent and financially literate, as required by SEC Rule
10A-3, the AMEX and the TSX.

|Name of Member        | Independent (1) | Financially Literate (2)
|--------------------- | --------------- | ------------------------
|Dale Hendrick (Chair) | Yes             | Yes                     
|Kent L. Noseworthy    | Yes             | Yes                     
|Frank Conte           | Yes             | Yes                     
|Canek Rangel          | Yes             | Yes                     

Notes:

> (1)

(2)

26

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Each member of the Audit Committee of the Corporation has
sufficient experience to provide (i) an understanding of the accounting
principles used by the Corporation to prepare its financial statements, (ii) an
ability to assess the general application of such accounting principles in
connection with the accounting for estimates, accruals and reserves, (iii)
experience in analyzing and evaluating financial statements of the breadth and
complexity of issues reasonably expected to be raised by the Corporation's
financial statements, and (iv) an understanding of internal controls and
procedures for financial reporting.
Dale M. Hendrick is a professional engineer with over 40
  years of mining experience. In addition, Mr. Hendrick has served as a senior
  officer of a public company.
  Kent L. Noseworthy is a practicing corporate/commercial
  lawyers with over twenty years of experience in advising corporate clients on
  business law and governance issues.
  Frank Conte has retired as a senior manage of Saputo Inc.
  with extensive budgeting, financial reporting and internal control
  responsibilities.
  Canek Rangel is a professional engineer experienced in
  business issues related to mining and the conduct of mining activities in
  Mexico.Audit Committee Oversight
Since the commencement of the Corporation's most recently
completed financial year, there has not been a recommendation of the Audit
Committee to nominate or compensate an external auditor which was not adopted by
the Corporation's Board of Directors.
Reliance on Certain Exemptions
Since the commencement of the Corporation's most recently
completed financial year, the Corporation has not relied on the exemption in
Section 2.4 (De Minimus Non-Audit Services) of MI 52-110, or an exemption
from MI 52-110, in whole or in part, granted under Part 8 (Exemptions) of
MI 52-110.
Pre-Approval Policies and Procedures
The Audit Committee has adopted specific policies and procedures for the
engagement of non-audit services as described in "Specific Duties - Oversight of
the Independent Auditor" of the Charter.
External Auditor Service Fees (By Category)
The following table discloses the fees billed to the Corporation by its
external auditor during the five months ended December 31, 2005; and twelve
months ended July 31, 2005:

|Financial Year    | Audit Fees (1) | Audit Related Fees (2) | Tax Fees (3) | All Other Fees(4)
|----------------- | -------------- | ---------------------- | ------------ | -----------------
|Ending            |                |                        |              |                  
|December 31, 2005 | $76,480        | $nil                   | $26,489      | $18,000          
|July 31, 2005     | $189,200       | $nil                   | $8,000       | $Nil             

27

---

Notes:
  (1) The aggregate fees billed for
  audit services.
  (2) The aggregate fees billed for
  assurance and related services that are reasonably related to the performance
  of the audit or review of the Corporation's financial statements and are not
  disclosed in the "Audit Fees" column.
  (3) The aggregate fees billed for
  tax compliance, tax advice, and tax planning services.
  (4) For the year ended December
  31, 2005, these services included the documentation of the Company's internal
  control procedures. For the year ended July 31, 2005, no such services were
  provided.ITEM 15: ADDITIONAL INFORMATIONAdditional information relating to the Corporation filed
under its continuous disclosure obligations is available on SEDAR (the System
for Electronic Document Analysis and Retrieval, which has been established by
the Canadian Securities Administrators) at www.sedar.com.
Upon request to the Corporation, the Corporation will provide to any person
or company
(a) when the securities of the Corporation are in the course of a
  distribution under a preliminary short form prospectus or a short form
  prospectus,
  (i) one copy of the annual information form of the Corporation, together
    with one copy of any document, or the pertinent pages of any document,
    incorporated by reference in the annual information form;
    (ii) one copy of the comparative financial statements of the Corporation
    for its most recently completed financial year for which financial
    statements have been filed together with the accompanying report of the
    auditor and one copy of the most recent interim financial statements of the
    Corporation that have been filed, if any, for any period after the end of
    its most recently completed financial year;
    (iii) one copy of the information circular of the Corporation in respect
    of its most recent annual meeting of shareholders that involved the election
    of directors or one copy of any annual filing prepared instead of that
    information circular, as appropriate, and
    (iv) one copy of any other documents that are
    incorporated by reference into the preliminary short form prospectus to the
    short form prospectus and are not required to be provided under clauses (i),
    (ii) or (iii); or
  (b) at any other time, one copy of any documents referred to in clauses (a)(i),
  (ii) and (iii), provided that the Corporation may require the payment of a
  reasonable charge if the request is made by a person or company who is not a
  shareholder of the Corporation.
Additional information, including directors' and officers'
remuneration and indebtedness, principal holders of the Corporation's
securities, options to purchase securities and interests of insiders in material
transactions, where applicable, is contained in the Corporation's management
information circular for its most recent annual meeting of shareholders that
involved the election of directors, and additional financial information is
provided in the Corporation's financial statements and management's discussion
and analysis contained in the Corporation's Annual Report for its most recently
completed financial year.28A copy of such documents may be obtained, upon request, from
the Corporation. The Corporation may require the payment of a reasonable charge
from a person or Corporation who is not a holder of securities of the
Corporation.
For additional copies of this annual information form please contact:
Gammon Lake Resources Inc. 
Suite 306, Cambridge 2 
202 Brownlow Avenue 
Dartmouth, Nova Scotia 
B3B 1T5 
Tel: 902-468-0614 
Fax: 902-468-0631 
Email: info@gammonlake.com







29

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SCHEDULE "A"

GAMMON LAKE RESOURCES INC. 
AUDIT COMMITTEE CHARTER

AUDIT COMMITTEE

The Audit Committee (hereinafter referred to as the
"Committee") shall i) assist the Board of Directors in its oversight role with
respect to the quality and integrity of the financial information; ii) assess
the effectiveness of the Company's risk management and compliance practices;
iii) the independent auditor's performance, qualifications and independence; iv)
the performance of the Company's internal audit function; v) the Company's
compliance with legal and regulatory requirements, and vi) prepare such reports
of the Audit Committee required to be included in Management Information
Circular in accordance with applicable laws or the rules of applicable
securities regulatory authorities.

STRUCTURE AND OPERATIONS

The committee shall be composed of not less than three
directors. All members of the Committee shall not be an officer or employee of
the Company. All members shall satisfy the applicable independence and
experience requirements of the laws governing the Company, the applicable stock
exchanges on which the Company's securities are listed and applicable securities
regulatory authorities.

Members of the committee shall be appointed or reappointed at
the annual meeting of the Company and in the normal course of business will
serve a minimum of three years. Each member shall continue to be a member of the
Committee until a successor is appointed, unless the member resigns, is removed
or ceases to be a director. The Board of Directors may fill a vacancy that
occurs in the Committee at any time.

Each member of the Audit Committee shall be financially literate, as such
qualification is interpreted by the Board of Directors in its business judgment.

The Chief Financial Officer holds the authority to approve tax compliance and
planning work without the Audit Committee's approval.

The Board of Directors or, in the event of its failure to do
so, the members of the Committee, shall appoint or reappoint, the annual meeting
of the Company a Chairman among their number. The Chairman shall not be a former
officer of the Company. Such Chairman shall serve as a liaison between members
and senior management. The time and place of meetings of the Committee and the
procedure at such meetings shall be determined from time to time by the members
therefore provided that:

> a) a quorum for meetings shall be
>   at least three members;
>   b) the Committee shall meet at
>   least quarterly;
>   c) notice of the
>   time and place of every meeting shall be given in writing or by telephone,
>   facsimile, email or other electronic communication to each member of the
>   Committee at least 24 hours in advance of such meeting;

1

---



> d) a resolution
>   in writing signed by all directors entitled to vote on that resolution at a
>   meeting of the Committee is valid as if it had been passed at a meeting of the
>   Committee.

The Committee shall report to the Board of Directors on its
activities after each of its meetings. The Committee shall review and assess the
adequacy of this Charter annually and, where necessary, will recommend changes
to the Board of Directors for its approval. The Committee shall undertake and
review with the Board of Directors an annual performance evaluation of the
Committee, which shall compare the performance of the Committee with the
requirements of this Charter and set forth the goals and objectives of the
Committee for the upcoming year. The performance evaluation by the Committee
shall be conducted in such manner as the Committee deems appropriate. The report
to the Board of Directors may take the form of an oral report by the chairperson
of the Committee of any other designated member of the Committee.

SPECIFIC DUTIES:

Oversight of the Independent Auditor

- Sole authority to appoint or replace the independent auditor (subject
  to shareholder ratification) and responsibility for the compensation and
  oversight of the work of the independent auditor (including resolution of
  disagreements between management and the independent auditor regarding
  financial reporting) for the purpose of preparing or issuing an audit report
  or related work. The independent auditor shall report directly to the Audit
  Committee.
- Sole authority to pre-approve all audit services as well as non-audit
  services (including the fees, terms and conditions for the performance of such
  services) to be performed by the independent auditor. The Chief Financial
  Officer holds the authority to approve tax compliance and planning work
  without the Audit Committee's approval.
- Evaluate the qualifications, performance and independence of the
  independent auditor, including (i) reviewing and evaluating the lead partner
  on the independent auditor's engagement with the Company, and (ii) considering
  whether the auditor's quality controls are adequate and the provision of
  permitted non-audit services is compatible with maintaining the auditor's
  independence.
- Obtain and review a report from the independent auditor at least annually
  regarding: the independent auditor's internal quality-control procedures; any
  material issues raised by the most recent internal quality-control review, or
  peer review, of the firm, or by any inquiry or investigation by governmental
  or professional authorities within the preceding five years respecting one or
  more independent audits carried out by the firm; any steps taken to deal with
  any such issues; and all relationships between the independent auditor and the
  Company.
- Review and discuss with management and the independent auditor prior to
  the annual audit the scope, planning and staffing of the annual audit.
- Ensure the rotation of the lead (or coordinating) audit partner having
  primary responsibility for the audit and the audit partner responsible for
  reviewing the audit as required by law.

2

---



- 

Financial Reporting

- Review and discuss with management and
  the independent auditor the annual audited financial statements prior to the
  publication of earnings.
- Review and discuss with management and
  the independent auditor the Company's annual and quarterly disclosures made in
  management's discussion and analysis. The Audit Committee shall approve any
  reports for inclusion in the Company's Annual Report, as required by
  applicable legislation.
- Review and discuss with management and
  the independent auditor managements' report on its assessment of internal
  controls over financial reporting and the independent auditors' attestation
  report on managements' assessment.
- Review and discuss with management and
  the independent auditor the Company's quarterly financial statements prior to
  the publication of earnings, including the results of the independent
  auditor's review of the quarterly financial statements and any matters
  required to be communicated by the independent auditor under applicable review
  standards.
- Review and discuss with management and
  the independent auditor at least annually significant financial reporting
  issues and judgments made in connection with the preparation of the Company's
  financial statements, including any significant changes in the Company's
  selection or application of accounting principles, any major issues as to the
  adequacy of the Company's internal controls and any special steps adopted in
  light of material control deficiencies.
- Review and discuss with management and
  the independent auditor at least annually reports from the independent
  auditors on: critical accounting policies and practices to be used;
  significant financial reporting issues, estimates and judgments made in
  connection with the preparation of the financial statements; alternative
  treatments of financial information within generally accepted accounting
  principles that have been discussed with management, ramifications of the use
  of such alternative disclosures and treatments, and the treatment preferred by
  the independent auditor; and other material written communications between the
  independent auditor and management, such as any management letter or schedule
  of unadjusted differences.
- Discuss with the independent auditor at
  least annually any "management" or "internal control" letters issued or
  proposed to be issued by the independent auditor to the Company.
- Review and discuss with management and
  the independent auditor at least annually any significant changes to the
  Company's accounting principles and practices suggested by the independent
  auditor, internal audit personnel or management.

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Review and discuss with
  management and the independent auditor at least annually the effect of
  regulatory and accounting initiatives as well as off-balance sheet structures
  on the Company's financial statements.

Discuss with the
  independent auditor matters required to be discussed by American Institute of
  Certified Public Accountants Statement on Auditing Standards No. 61 relating
  to the conduct of the audit, including any difficulties encountered in the
  course of the audit work, any restrictions on the scope of activities or
  access to requested information and any significant disagreements with
  management.

Review and discuss with
  the Chief Executive Officer and the Chief Financial Officer the procedures
  undertaken in connection with the Chief Executive Officer and Chief Financial
  Officer certifications for the annual filings with applicable securities
  regulatory authorities.

Review disclosures made
  by the Company's Chief Executive Officer and Chief Financial Officer during
  their certification process for the annual filing with applicable securities
  regulatory authorities about any significant deficiencies in the design or
  operation of internal controls which could adversely affect the Company's
  ability to record, process, summarize and report financial data or any
  material weaknesses in the internal controls, and any fraud involving
  management or other employees who have a significant role in the Company's
  internal controls.

Discuss with the
  Company's General Counsel at least annually any legal matters that may have a
  material impact on the financial statements, operations, assets or compliance
  policies and any material reports or inquiries received by the Company or any
  of its subsidiaries from regulators or governmental agencies.

Oversight of Risk Management

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Oversight of Regulatory Compliance

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FUNDING FOR THE INDEPENDENT AUDITOR AND RETENTION OF OTHER INDEPENDENT
ADVISORS:

The Company shall provide for appropriate funding, as
determined by the Audit Committee, for payment of compensation to the
independent auditor for the purpose of issuing an audit report and to any
advisors retained by the Audit Committee. The Audit Committee shall also have
the authority to retain such other independent advisors as it may from time to
time deem necessary or advisable for its purposes and the payment of
compensation therefor shall also be funded by the Company.

Committee Members:

Dale Hendrick (Chair) 
Frank Conte 
Kent Noseworthy 
Canek Rangel





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