EXHIBIT 99.4





                           GAMMON LAKE RESOURCES INC.








                      NOTICE OF ANNUAL AND SPECIAL MEETING

                                       OF

                                  SHAREHOLDERS

                                       AND

                         MANAGEMENT INFORMATION CIRCULAR









                               SEPTEMBER 22, 2003


<PAGE>


                           GAMMON LAKE RESOURCES INC.

              NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that an annual and special meeting of the shareholders of
Gammon Lake  Resources  Inc. (the  "Corporation")  will be held at 1 Place Ville
Marie, Suite 3900, Montreal, Quebec, H3B 4M7 on Monday, October 27, 2003, at the
hour of 11:00 o'clock in the morning (Montreal time) for the following purposes:

1.   To receive and consider the audited  consolidated  financial  statements of
     the Corporation for the twelve months ended July 31, 2003,  together with a
     report of the auditors thereon;

2.   To elect directors;

3.   To  appoint   auditors  and  to  authorize   the  directors  to  fix  their
     remuneration;

4.   To consider,  and, if thought fit, pass an ordinary  resolution  increasing
     the maximum  number of common  shares  reserved for grants of options under
     the Corporation's stock option plan for directors,  officers, employees and
     consultants  of the  Corporation  and its  subsidiaries  (the "Stock Option
     Plan") from  9,125,000 to 11,500,000  common shares,  as more  particularly
     described in the attached management information circular (the full text of
     the Stock Option Plan, as amended, and the proposed ordinary resolution are
     attached to the management  information  circular as Schedules "B" and "C",
     respectively);

5.   To consider, and, if thought fit, pass an ordinary resolution approving the
     grant of a total of 3,900,000 options to directors, officers, employees and
     consultants of the Corporation under the terms of the  Corporation's  Stock
     Option Plan, as proposed to be amended,  as more particularly  described in
     the attached management information circular (the full text of the proposed
     ordinary resolution is attached to the management  information  circular as
     Schedule "D");

6.   To consider, and, if thought fit, pass an ordinary resolution approving the
     issuance in one or more private  placements  during the twelve month period
     commencing on the date of the annual and special meeting, of such number of
     securities that would result in the Corporation  issuing or making issuable
     up to 100% of the number of common shares of the Corporation outstanding as
     at the  date  hereof,  as  more  particularly  described  in  the  attached
     management  information  circular  (the full text of the proposed  ordinary
     resolution is attached to the management  information  circular as Schedule
     "E"); and

7.   To transact such further or other  business as may properly come before the
     meeting or any adjournment or adjournments thereof.

This notice is accompanied by a form of proxy, a management information circular
and the audited  consolidated  financial  statements of the  Corporation for the
twelve  months  ended July 31, 2003.  Shareholders  who are unable to attend the
meeting in person are requested to complete, date, sign


<PAGE>


and  return  the  enclosed  form of proxy so that as large a  representation  as
possible may be had at the meeting.

DATED at Toronto, Ontario this 22nd day of September, 2003.

                                           BY ORDER OF THE BOARD
                                           (Signed): "Bradley H. Langille"
                                           BRADLEY H. LANGILLE
                                           CHIEF EXECUTIVE OFFICER




                                       3
<PAGE>



                           GAMMON LAKE RESOURCES INC.
                               202 Brownlow Avenue
                             Cambridge 2, Suite 306
                             Dartmouth, Nova Scotia
                                     B3B 1T5


                         MANAGEMENT INFORMATION CIRCULAR

     This  Management  Information  Circular is furnished in connection with the
Annual and General  Meeting (the "Meeting") of the holders  ("Shareholders")  of
common shares ("Common  Shares") of Gammon Lake Resources Inc.  ("Gammon" or the
"Corporation")  to be held on Monday,  October 27,  2003 at 11:00 p.m.  (Eastern
Daylight Savings Time) at Suite 3900, 1, Place  Ville-Marie,  Montreal,  Quebec,
H3B 4M7 and at any continuation thereof after an adjournment.

     The information  contained  herein is given as of July 31, 2003,  except as
otherwise stated.

     Pursuant to the Multijurisdictional Disclosure System adopted by the United
States Securities and Exchange Commission, the Corporation is a "foreign private
issuer" and, accordingly, is not subject to the proxy rules under the Securities
Exchange Act of 1934, as amended.

                         SECTION I - VOTING INFORMATION

Solicitation of Proxies

     The enclosed proxy is being  solicited by or on behalf of the management of
the  Corporation.  The mailing to  Shareholders  of this  Circular will be on or
about  September 30, 2003.  The cost of soliciting  proxies will be borne by the
Corporation.  While  most  proxies  will  be  solicited  by mail  only,  regular
employees of the Corporation may also solicit proxies by telephone or in person.
Such employees will receive no additional  compensation for these services other
than  their  regular  salaries,  but will be  reimbursed  for  their  reasonable
expenses.

     The  Corporation  will  provide  proxy  materials  to brokers,  custodians,
nominees  and  fiduciaries  and will  request  that such  materials  be promptly
forwarded to the beneficial  owners of Common Shares  registered in the names of
such  brokers,  custodians,  nominees  and  fiduciaries.  The  Corporation  will
reimburse  brokers,  custodians,  nominees and fiduciaries for their  reasonable
charges and expenses incurred in forwarding proxy materials to beneficial owners
of Common Shares.

Voting Common Shares

     The Board of Directors of Gammon has fixed September 22, 2003 as the record
date for the purpose of determining  Shareholders  entitled to receive Notice of
the Meeting (the "Meeting Record Date").

     The  Corporation  will prepare,  no later than ten (10) days  following the
Meeting Record Date, a list of  Shareholders  entitled to vote as of the Meeting
Record Date,  showing the number of Common Shares held by each such Shareholder.
Each person  named on the list of  Shareholders  is entitled to one (1) vote for
each Common  Share held,  except to the extent  that:  (i) the  Shareholder  has
transferred  any Common  Shares  after the  Meeting  Record  Date;  and (ii) the
transferee of those Common Shares produces properly endorsed share  certificates
or otherwise establishes ownership of those Common Shares and requests not later
than ten (10) days before the date of the Meeting that the transferee's  name be
included  on such list  before  the  Meeting,  in which case the  transferee  is
entitled to vote those Common Shares at the Meeting.



                                       4
<PAGE>

Shareholders  may  also  cast  their  vote  electronically  or by  telephone  by
following the  instructions on the enclosed form of proxy or voting  instruction
form.

Registered Shareholders

     Registered  shareholders are  Shareholders  whose Common Shares are held in
their own name and they will have received a proxy form in their own name.

Non-Registered/Beneficial Shareholders

     Beneficial  Shareholders  are  Shareholders  who do not hold  their  Common
Shares in their own name,  but rather in the name of a nominee - this could be a
bank, trust company,  securities  broker or other financial  institution (and is
known as holding in "street form").

     If you are a  non-registered  Shareholder,  there  are two (2) ways you can
vote your Common Shares held by your  nominee.  Your nominee is required to seek
voting  instructions  from you in advance  of the  Meeting  in  accordance  with
securities  laws,  and so you will receive,  or will have already  received from
your nominee,  a request for voting  instructions or a proxy form for the number
of Common  Shares you hold.  Every  nominee has its own mailing  procedures  and
provides its own signing and return instructions.  Therefore, please follow them
in order to make sure that your Common Shares are voted.

     Alternatively,  if you wish to vote in person at the Meeting, please insert
your own name in the space provided on the "Request for Voting  Instructions" or
proxy form to appoint  yourself as proxyholder and follow the signing and return
instructions of your nominee. Non-registered Shareholders who appoint themselves
as proxyholders  should, at the Meeting,  present themselves to a representative
of Computershare Trust Company of Canada.

Appointment of Proxy Holders

     The  persons  named in the  enclosed  form of proxy  are  directors  and/or
officers of Gammon.  A  Shareholder  has the right to appoint  some other person
(who need not be a  Shareholder)  to attend and to act for and on behalf of such
Shareholder at the Meeting.  To exercise this right, the Shareholder must either
insert the name of the desired  person in the blank space  provided in the proxy
and strike out the other  names or submit  another  proper form of proxy and, in
either case,  deliver the  completed  proxy by post or other form of delivery to
Gammon at its registered office at 202 Brownlow Avenue,  Cambridge 2, Suite 306,
Dartmouth, Nova Scotia, B3B 1T5, or to the transfer agent for the Common Shares,
Computershare  Trust  Company  of  Canada,  100  University  Avenue,  9th Floor,
Toronto, Ontario M5J 2YI, in either case to be received not later than the close
of business on October  17, 2003 or, in the event of an  adjournment,  not later
than two (2) business days preceding the day to which the Meeting is adjourned.

     All Common Shares  represented by a properly  executed and deposited  proxy
will be voted or withheld from voting on the matters identified in the Notice of
Meeting in accordance  with the  instructions  of the  Shareholder  as specified
thereon.

     If you have appointed a person who was designated by Gammon to vote on your
behalf as  provided  in the  enclosed  form of proxy and you do not  provide any
instructions  concerning  any matter  identified  in the Notice of Meeting,  the
Common Shares represented by such proxy will be voted:

     (1)  FOR the election of the persons nominated for election as directors of
          Gammon;



                                       5
<PAGE>

     (2)  FOR the re-appointment of Grant Thornton LLP,  Chartered  Accountants,
          as auditor of Gammon and to  authorize  the Board of  Directors to fix
          the remuneration of the auditor;

     (3)  FOR an increase in the maximum  number of common  shares  reserved for
          grants of options under the Corporation's stock option plan;

     (4)  FOR the  approval  of a  grant  of  3,900,000  options  to  directors,
          officers, employees and consultants of the Corporation under the terms
          of the Corporation's stock option plan; and

     (5)  FOR the approval of one or more private  placements  during the twelve
          month period commencing on the date of the annual and special meeting,
          of such  number of  securities  that would  result in the  Corporation
          issuing or making  issuable up to 100% of the number of common  shares
          of the Corporation outstanding as at the date hereof.

     The enclosed form of proxy,  when properly  signed,  confers  discretionary
authority  on the person or persons  named to vote on any  amendment  to matters
identified  in the Notice of Meeting  and on any other  matter  properly  coming
before the Meeting. Management is not aware of any such matter; however, if such
matter  properly  comes  before the  Meeting,  the proxies  will be voted at the
discretion of the person or persons named therein. The persons named in the form
of proxy are either officers or directors of Gammon.

Revocability of Proxies

     A Shareholder  executing the enclosed form of proxy has the right to revoke
it at any time before it is exercised.  Relevant provisions of the Companies Act
(Quebec) (the "QCA") provide that a Shareholder may revoke a proxy by depositing
an  instrument  in  writing,  executed  by  the  Shareholder  or by an  attorney
authorized in writing, at, or by transmitting, by telephonic or electronic means
or any other manner permitted by law, a revocation to, the registered  office of
the  Corporation at any time up to and including the last business day preceding
the day of the  Meeting,  or any  adjournment  thereof,  or by  depositing  such
instrument  with the  Chair of the  Meeting  on the day of the  Meeting,  or any
adjournment thereof, or in any other manner permitted by law.

Voting Shares and Principal Shareholders

     The authorized  capital of the Corporation  consists of an unlimited number
of Common Shares.  As of September 22, 2003, there were 47,540,572 Common Shares
outstanding.  Each Common Share  carries the right to one (1) vote on any matter
properly  coming  before the Meeting.  A quorum for the meeting of  Shareholders
must have two (2) persons  present  and  authorized  to vote and must  represent
one-third (1/3) of the total number of outstanding Common Shares.

     To the knowledge of the  directors and officers of Gammon,  the only person
or company that beneficially owns, directly or indirectly,  or exercises control
or direction over, in excess of 10% of the outstanding Common Shares is:

<TABLE>
Name and Address of Beneficial Owner (1)                Number of Common Shares (1)         % of Class (2)
----------------------------------------                ---------------------------         --------------
<S>                                                       <C>                                 <C>
Canadian Depositary for Securities Limited                    35,931,010                         75.6

Notes:
(1)  Based upon public filings with securities regulatory  authorities in Canada
     on SEDAR.
(2)  Calculated  on the basis of  47,540,572  Common  Shares  outstanding  as of
     September 22, 2003.
</TABLE>



                                       6
<PAGE>

                      SECTION II - BUSINESS OF THE MEETING

1.   Financial Statements and Auditor's Report

     The   Management's   Discussion   and   Analysis,   including  the  audited
consolidated financial statements of Gammon for the year ended July 31, 2003 and
the  auditor's  report on those  financial  statements,  are  included  with the
mailing of this  Circular.  Additional  copies may be obtained  from Gammon upon
request.

2.   Election of Directors

     The  articles of Gammon  provide that the board of directors of Gammon (the
"Board of  Directors")  shall consist of a minimum of three (3) and a maximum of
ten (10) directors and the number may be fixed from time to time by the Board of
Directors.  The Board of Directors has set the number of directors to be elected
at the Meeting at six (6).

     The nominees for election as directors of Gammon are listed  below,  all of
whom are  currently  serving as  directors of Gammon.  The persons  proposed for
election  are, in the opinion of the Board of  Directors  and  management,  well
qualified to act as directors for the forthcoming year.

     Such  nominees,  if elected,  will serve  until the next Annual  Meeting of
Shareholders or until his successor is duly elected or appointed. Management has
been informed  that each nominee is willing to serve as a director,  if elected.
Management  recommends  a vote for all nominees for election as directors of the
Corporation.

     The  following  table  sets out the  names of the six (6)  nominees,  their
principal  occupation or employment and the year from which each has continually
served as a director  of Gammon.  The table also sets out, as of  September  22,
2003, the number of Common Shares owned by each of them or over which control or
direction is exercised by each of them,  and the number of stock  options  which
they hold in Gammon.

<TABLE>
                               NOMINEES FOR ELECTION AS DIRECTORS

                                                                        Common               Stock
Name, Position with the Corporation and/or Principal Occupation         Shares               Options
---------------------------------------------------------------         ------               -------
<S>                                                                    <C>                  <C>
FRED GEORGE                                                            1,147,200            2,200,000
Resident of Bedford, Nova Scotia
  Chairman & President of Gammon Lake
  Director of Gammon and its predecessor companies since 1996

BRADLEY H. LANGILLE (4)                                                1,176,900            1,987,500
Resident of Halifax, Nova Scotia
  Chief Executive Officer of Gammon Lake
  Director of Gammon and its predecessor companies since 1996

RODOLFO NIEBLAS (1)(2)(3)                                                 nil                  82,000
Resident of Mexico City, Mexico
  Chief of Staff, Federal Electricity Commission, Mexico
  Director of Gammon since 2002
</TABLE>



                                       7
<PAGE>

<TABLE>
<S>                                                                    <C>                  <C>
ALEJANDRO CARAVEO (1)(2)(4)                                               29,550               65,000
Resident of Chihuahua City, Mexico
  President, Compania Tecnica Minera S.A. de C.V.
  Director of Gammon Lake since 2002

DALE M. HENDRICK  (1)(2)(3)(4)                                            50,000               50,000
Resident of Toronto, Ontario
  President of Dale M. Hendrick & Associates Inc.
  Director of Gammon Lake since 2000

TERENCE W. COUGHLAN (3)                                                  144,400               65,000
Resident of Halifax, Nova Scotia
  Vice President of Gammon Lake
  Director of Gammon and its predecessor companies since 1996

Notes:
(1)  Member of the Audit Committee.
(2)  Member of the Nominating and Corporate Governance Committee.
(3)  Member of the Compensation Committee.
(4)  Member of the Health, Safety and Environment Committee.
</TABLE>


     The Corporation does not have an executive committee.

     The  Corporation  has an Audit  Committee,  as required by the QCA, and its
members are Dale M. Hendrick (Chair), Alejandro Caraveo and Rodolfo Nieblas. See
"Section IV - Corporate  Governance  -  Committees  of the Board of  Directors -
Audit Committee".

     Alejandro  Caraveo  (Chair),  Dale M. Hendrick and Rodolfo Nieblas comprise
the Nominating and Corporate Governance Committee of the Board of Directors. See
"Section IV - Corporate  Governance  -  Committees  of the Board of  Directors -
Nominating and Corporate Governance Committee".

     Rodolfo Nieblas (Chair),  Terence W. Coughlan and Dale M. Hendrick comprise
the  Compensation  Committee  of the  Board  of  Directors.  See  "Section  IV -
Corporate  Governance  -  Committees  of the Board of  Directors -  Compensation
Committee".

     Bradley  H.  Langille  (Chair),  Alejandro  Caraveo  and  Dale M.  Hendrick
comprise the Health, Safety and Environment Committee of the Board of Directors.
See "Section IV - Corporate  Governance - Committees of the Board of Directors -
Health, Safety and Environment Committee".

3.   Re-Appointment of Auditor

     The Board of  Directors  recommends  that  Grant  Thornton  LLP,  Chartered
Accountants,  be re-appointed as Gammon's auditor to hold office until the close
of the next Annual  Meeting and that the Board of Directors be authorized to fix
their remuneration as such.

     Representatives  of Grant Thronton LLP will be present at the Meeting.  See
"Section III - Executive  Compensation  and Other  Information  - Disclosure  of
Auditor Fees".



                                       8

<PAGE>

4.   Approval of Amendment to the Stock Option Plan

     On September 22, 2003, the board of directors of the Corporation approved a
proposed  amendment  to the  Corporation's  Stock Option  Plan,  increasing  the
maximum  number of Common  Shares that may be reserved  for the grant of options
under the plan from  9,125,000 to  11,500,000  Common  Shares.  The amendment is
subject to the approval of  shareholders  of the  Corporation  at the annual and
special meeting. The full text of the Stock Option Plan, reflecting the proposed
amendment,  as well as the proposed ordinary resolution  approving the amendment
to the Stock Option Plan are attached to the management  information circular as
Schedules "B" and "C", respectively.

5.   Approval of Option Grants under the Stock Option Plan

     During the past fiscal  year,  the board of  directors  of the  Corporation
approved several grants of a total of 3,900,000  options to directors,  officers
and  employees of the  Corporation  under the terms of the  Corporation's  Stock
Option  Plan.  These  options  exceeded the  existing  maximum  number of shares
issuable  under  the plan  and,  as such,  are not  exercisable  until  they are
approved,  together  with the proposed  amendment  to the Stock Option Plan,  by
shareholders of the Corporation at the annual and special meeting. The following
table provides details with respect to the options proposed to be approved:


<TABLE>
------------------------------------------------------------------------------------------------------------------
Holders                         Number of Shares     Exercise Price    Date of Grant           Expiry Date
                                Under Option (#)     ($/share)
------------------------------------------------------------------------------------------------------------------
<S>                                <C>                  <C>                  <C>                     <C>
Officers and Directors             2,382,000            $2.60           July 4, 2003            July 4, 2008

Employees & Consultants            1,518,000            $2.60           July 4, 2003            July 4, 2008
------------------------------------------------------------------------------------------------------------------
</TABLE>


     The full text of the proposed  ordinary  resolution  approving the grant of
3,900,000  options  under the terms of the Stock  Option Plan is attached to the
management information circular as Schedule "D".

6.   Advance Approval of Private Placements

     From time to time,  the  Corporation  investigates  opportunities  to raise
funds  on  advantageous  terms  in  order  to  expand  its  mineral  exploration
activities.  The Corporation expects to undertake one or more of such financings
over  the  next  year  and  expects  some of them to be  structured  as  private
placements.

     Pursuant to applicable  regulatory  requirements,  the aggregate  number of
shares of a listed  company  which are issued or made subject to issuance  (i.e.
issuable under a share purchase warrant or option or other convertible security)
by way of one or more  private  placement  transactions  during  any  particular
six-month  period must not exceed 25% of the number of shares  outstanding (on a
non-diluted basis) prior to giving effect to such transactions (the "25% Rule"),
unless there has been shareholder approval of such transactions.

     The  application  of the 25%  Rule may  restrict  the  availability  to the
Corporation  of  funds  which it may wish to  raise  in the  future  by  private
placement  of its  securities.  In  particular,  management  of the  Corporation
considers it to be in the best interests of the  Corporation to solicit  private
placement  funds  for  working  capital  and the  Corporation's  operations.  In
accordance  with  applicable  regulatory  practices,  the Corporation may obtain
advance  approval by shareholders of private  placements that may exceed the 25%
Rule,  provided such private  placements  are completed  within 12 months of the
date such advance shareholder approval is given.

     The  Corporation's  issued  and  outstanding  share  capital as at the date
hereof is 47,540,572 Common Shares and the Corporation proposes that the maximum
number of shares which either would be issued or made subject to issuance  under
one or more private placements in the twelve-month period



                                       9
<PAGE>

commencing on October 27, 2003 would not exceed  47,540,572 Common Shares in the
aggregate,  or 100% of the Corporation's issued and outstanding share capital as
at September 15, 2003.

     Any private  placement  proceeded with by the Corporation under the advance
approval  being sought at the annual and special  meeting will be subject to the
following additional restrictions:  (i) it must be substantially with parties at
arm's length to the Corporation; (ii) it cannot materially affect control of the
Corporation;  (iii) it must be completed  within a twelve month period following
the date the  shareholder  approval  is  given;  and  (iv) it must  comply  with
applicable  private  placement  pricing rules which  currently  require that the
issue price per Common Share must not be lower than the closing  market price of
the Common  Shares on the  trading  day prior to the date  notice of the private
placement is given to the applicable  regulatory authority (the "Market Price"),
less the applicable discount, as follows:

                  Market Price                       Maximum Discount
                  ------------                       ----------------
                  $0.50 or less                      25%
                  $0.51 to $2.00                     20%
                  Above $2.00                        15%

(For these purposes, a private placement of unlisted  convertible  securities is
deemed to be a private placement of the underlying listed securities at an issue
price equal to the lowest possible price at which the securities are convertible
by the holders thereof).

     Whether or not a particular placement is "substantially" at arm's length or
will  materially  affect  control of the  Corporation  (in which  case  specific
shareholder  approval may be required) is a matter  determined at the discretion
of the applicable regulatory authorities.

     In  anticipation  that the  Corporation  may wish to enter into one or more
private  placements in the next 12 months that will result in it issuing  and/or
making issuable such number of its Common Shares, taking into account any shares
that may be issued  upon  exercise  of any  warrants,  options  or other  rights
granted in  connection  with the  private  placements,  that will exceed the 25%
Rule, the Corporation requests that its shareholders pass an ordinary resolution
approving the issuance in one or more private placements during the twelve month
period  commencing  October  27, 2003 of such  number of  securities  that would
result in the  Corporation  issuing or making  issuable up to 47,540,572  Common
Shares.  The full  text of the  proposed  ordinary  resolution  to be  passed by
shareholders is attached to the Circular as Schedule "E".


           SECTION III - EXECUTIVE COMPENSATION AND OTHER INFORMATION

Compensation of the Directors

     Directors of the  Corporation  who are not employees of the Corporation are
remunerated for their services as follows:

     o   Annual fee                                                        $nil

     o   Annual fee paid to the Chair of any committee of
            the Board of Directors                                         $nil
     o   Attendance fee for any meeting of the Board of
          Directors or any committee of the Board of Directors             $nil

     The committee meeting fee is reduced to $nil if such meeting is held on the
same day as a meeting of the Board of  Directors.  If a director  is required to
travel for an additional  day to attend a meeting of the Board of Directors or a
committee  meeting,  an  additional  attendance  fee of $nil is  payable to such
director.  Directors are reimbursed for their  reasonable  expenses  incurred to
attend meetings.



                                       10
<PAGE>

Officers of the Corporation

     The  following  table sets out the officers of the  Corporation  and, as of
September  22, 2003,  the number of Common  Shares owned by each of them or over
which control or direction is exercised by each of them, and the number of stock
options which they hold in Gammon.


                                    OFFICERS


<TABLE>
                                                                            Common            Stock
Name, Position with the Corporation and/or Principal Occupation             Shares           Options
---------------------------------------------------------------             ------           -------
<S>                                                                       <C>               <C>
FRED GEORGE                                                               1,147,200(1)      2,200,000
Resident of Bedford, Nova Scotia
  Chairman and President
  He has been a Director of Gammon and its
     predecessor companies since 1996.

BRADLEY H. LANGILLE                                                       1,176,900(1)      1,987,500
Resident of Halifax, Nova Scotia
  Chief Executive Officer
  He has been a Director of Gammon and its
     predecessor companies since 1996.

GREGORY K. LILLER                                                             nil             220,000
Resident of Tuscon, Arizona Vice President,
     Exploration He has been with Gammon since 2000.

TERENCE W. COUGHLAN                                                         144,400(2)         65,000
Resident of Halifax, Nova Scotia
  Vice President
  He has been a Director of Gammon and its
     predecessor companies since 1996.

L. LEANNE DOWE, C.A.                                                          nil              10,000
Resident of Halifax, Nova Scotia
  Chief Financial Officer
  She has been with Gammon since 2003.

Notes:
(1)  Represents approximately 2% of outstanding Common Shares.
(2)  Represents less than 1% of outstanding Common Shares.
</TABLE>


                                       11
<PAGE>

Summary Compensation Table

     The  following  table  sets out,  for the  periods  indicated,  information
concerning the compensation  earned by the Chief Executive Officer and the other
five most highly compensated  "executive  officers" of the Corporation,  as that
term is  defined  by  applicable  securities  legislation  who earn in excess of
$100,000 per year.

<TABLE>
=========================================================================================================================
                                                                                                              All Other
Name and Principal                                                                                           Compensation
Position              Year            Annual Compensation                    Long Term Compensation             ($)(3)
-------------------------------------------------------------------------------------------------------------------------
                            Salary       Bonus       Other Annual
                             ($)(1)       ($)      Compensation ($)            Awards            Payouts
-------------------------------------------------------------------------------------------------------------------------
                                                                      Securities   Restricted
                                                                         Under      Shares Or
                                                                        Options    Restricted    LTIP
                                                                        Granted       Share     Payouts
                                                                        (#) (2)     Units ($)      ($)
-------------------------------------------------------------------------------------------------------------------------
<S>                  <C>    <C>        <C>           <C>              <C>            <C>         <C>            <C>
FRED GEORGE(5)        2003   161,769    150,000          nil          1,900,000(4)      -           -             -
Chairman and          2002   135,615     50,000          nil            300,000         -           -             -
President             2001   129,500       nil           nil              Nil           -           -             -
-------------------------------------------------------------------------------------------------------------------------
BRADLEY H. LANGILLE   2003   76,784      75,000          nil          1,400,000(5)      -           -             -
Chief Executive       2002   89,808      50,000          nil            150,000         -           -             -
Officer               2001   61,731        nil           nil              Nil           -           -             -
-------------------------------------------------------------------------------------------------------------------------
GREGORY K. LILLER     2003   148,964       Nil           nil           50,000(6)        -           -             -
Vice President,       2003   90,972        nil           nil            20,000          -           -             -
Exploration           2001   150,000       nil           nil              Nil           -           -             -
=========================================================================================================================
Notes:
(1)  These amounts  represent either salary or consulting fees paid to the Named
     Executive  Officer  or  consulting  companies  associated  with  the  Named
     Executive Officers.
(2)  Options to purchase  Common Shares  granted  purusant to the  Corporation's
     Stock Option Plan.  See,  "Section III - Executive  Compensation  and Other
     Information - Gammon Stock Option Plan".
(3)  The aggregate value of all other  compensation  paid to the Named Executive
     Officers  did not  exceed  $50,000  or 10% of the  total of such  officers'
     respective salary and bonuses in any year.
(4)  Of this  amount,  a total of  1,100,000  are  subject  to the  approval  of
     shareholders at the annual and special meeting. See, "Section II - Business
     of the Meeting - 5. Approval of Option Grants under the Stock Option Plan".
(5)  Of this  amount,  a total of  1,200,000  are  subject  to the  approval  of
     shareholders at the annual and special meeting. See, "Section II - Business
     of the Meeting - 5. Approval of Option Grants under the Stock Option Plan".
(6)  Of  this  amount,  a  total  of  25,000  are  subject  to the  approval  of
     shareholders at the annual and special meeting. See, "Section II - Business
     of the Meeting - 5. Approval of Option Grants under the Stock Option Plan".
</TABLE>


Gammon Stock Option Plan

     Gammon has adopted a stock option plan (the "Gammon  Stock Option Plan") in
accordance  with the  requirements  of The Toronto  Stock  Exchange (the "Gammon
Stock Option Plan").

     Under the Gammon  Stock Option Plan,  the maximum  number of Common  Shares
that can be issued is  9,125,000.  As of September  22,  2003:  5,629,800 of the
stock options have been granted and exercised; 7,223,500 stock options have been
granted  but not  exercised;  and nil stock  options  are  reserved  for  future
granting.  It is proposed  that the maximum  number of shares that can be issued



                                       12
<PAGE>


under the Gammon Stock Option Plan be increased  from  9,125,000 to  11,500,000.
See  "Section  II - Business of the Meeting - 4.  Approval of  Amendment  to the
Stock  Option  Plan".  Certain  grants  made in the  past  year are  subject  to
shareholder approval. See "Section II - Business of the Meeting - 5. Approval of
Option Grants under the Stock Option Plan".

     The following  table sets forth details with respect to options to purchase
Common Shares which are  outstanding  under the Stock Option Plan as of the date
hereof:

<TABLE>
------------------------------------------------------------------------------------------------------------------------
Holder                Date of Grant        Common Shares      Exercise Price    Expiry Date            Market Price on
                                           Under Option #)    ($/share)                                Date of Grant(1)
------------------------------------------------------------------------------------------------------------------------
<S>                  <C>                   <C>                <C>               <C>                     <C>
Executive Officers    April 25, 2001          500,000            $1.50          April 25, 2006             $1.48
as a group            September 26, 2001       20,000            $0.50          September 26, 2006         $0.50
(5 in total)          February 7, 2002        150,000            $0.75          February 7, 2007           $0.65
                      March 15, 2002          437,000            $0.80          March 15, 2007             $0.80
                      October 9, 2002       1,025,000            $1.01          October 9, 2007            $1.01
                      July 4, 2003          2,350,000(2)         $2.60          July 9, 2008               $2.60
------------------------------------------------------------------------------------------------------------------------
Directors who are     January 31, 2000         40,000            $2.40          January 31, 2005           $2.30
not also executive    October 9, 2002         125,000            $1.01          October 9, 2007            $1.01
officers, as a group  July 4, 2003             32,000(2)         $2.60          July 9, 2008               $2.60
(3 in total)
------------------------------------------------------------------------------------------------------------------------
Employees             July 4, 2003             3,000(2)          $2.60          July 9, 2008               $2.60
(1 in total)
------------------------------------------------------------------------------------------------------------------------
Consultants           April 25, 2001           8,000             $1.50          April 25, 2006             $1.48
(12 in total)         September 26, 2001      50,000             $0.50          September 26, 2006         $0.50
                      February 7, 2002        75,000             $0.75          February 7, 2007           $0.65
                      March 1, 2002          100,000             $0.90          March 1, 2005              $0.89
                      March 15, 2002         448,000(4)          $0.80          March 15, 2007             $0.80
                      April 24, 2002          20,000(4)          $1.30          April 24, 2007             $1.28
                      May 21, 2002           300,000(4)          $1.60          May 21, 2004               $1.58
                      June 25, 2002           25,000(4)          $2.00          June 25, 2003              $1.56
                      July 4, 2003          1,515,000(2)         $2.60          July 9, 2008               $2.60
------------------------------------------------------------------------------------------------------------------------
Notes:
(1)  In accordance with the terms of the plan, based on the closing price of the
     common shares on the day preceding the date of grant of the options.
(2)  Subject to the approval of shareholders at the annual and special  meeting.
     See "Section II - Business of the Meeting - 4. Approval of Amendment to the
     Stock Option Plan" and "Section II - Business of the Meeting - 5.  Approval
     of Option Grants under the Stock Option Plan".
</TABLE>


     The  purpose  of the Gammon  Stock  Option  Plan is to  attract  and retain
superior employees,  to provide a strong incentive for employees and consultants
to put  forth  maximum  effort  for the  continued  success  and  growth  of the
Corporation  and, in combination with these goals, to encourage equity ownership
in the Corporation by its employees and consultants.

     The Gammon Stock  Option Plan is  administered  by the Board of  Directors,
with the Compensation Committee having been designated by the Board of Directors
to administer it. The Compensation  Committee has full and complete authority to
interpret the Gammon Stock Option Plan, to prescribe such rules and  regulations
as it deems necessary for the proper  administration  of the Gammon Stock Option
Plan and to make such  determinations  and to take such  actions  in  connection
therewith as it deems necessary or advisable.

     The Gammon Stock Option Plan is subject to the following:

     (a)  the  maximum  number of Common  Shares  which may be issued  under the
          Gammon  Stock  Option  Plan  shall not  exceed  9,125,000,  subject to
          adjustment.  The maximum number of Common Shares with respect to which
          grants may be made to any one (1)  employee  or his or her  associates
          (as that term is defined in the Securities  Act  (Ontario))  shall not
          exceed 5% of the issued  shares.  The maximum  number of Common Shares
          reserved for issuance to insiders



                                       13
<PAGE>

          (as defined in the Securities Act  (Ontario)) of the  Corporation  and
          their  associates  shall not exceed 10% of the  issuable  shares,  the
          maximum number of Common Shares which may be issued to insiders of the
          Corporation  and their  associates  under the Gammon Stock Option Plan
          within any one (1) year  period,  when taken  together  with any other
          share compensation arrangements,  shall not exceed 10% of the issuable
          shares for all such insiders and  associates in the aggregate  and, in
          the case of any one (1) insider and his or her  associates,  shall not
          exceed 5% of the issuable shares.

     (b)  the market value of Common Shares issued under the Gammon Stock Option
          Plan means the  closing  board lot sale price of the Common  Shares on
          the Toronto  Stock  Exchange  ("TSX") on the business day  immediately
          preceding  the date of grant and, if there was not a board lot sale on
          the TSX on such date, then the last board lot sale prior thereto.

     (c)  options are  exercisable  for a maximum  period of ten (10) years from
          the date of grant or such shorter  period as may be  determined at the
          time of the grant.

     (d)  grants made under the Gammon Stock Option Plan are not assignable.

     In 2003,  there were  3,350,000  stock  options  granted  to the  executive
officers of the  Corporation.  See "Executive  Compensation - Aggregated  Option
Grants during the Most Recently Completed Financial Year - 2003".

     The following table sets forth information  concerning the aggregated stock
options granted to the executive officers of the Corporation during 2003.

<TABLE>
                            Aggregated Option Grants during the Most Recently Completed
                              Financial Year - 2003

=============================================================================================================
                                         % of Total
                          Securities       Options                        Market Value of
                             Under       Granted to                         Securities
                            Options     Employees in     Exercise or   Underlying Options
                            Granted       Financial      Base Price    on the Date of Grant      Expiration
Name                          (#)          Year(1)      ($/Security)       ($/Security)             Date
-------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>             <C>                <C>           <C>
FRED GEORGE                 800,000         14.4%           $1.01              $1.01          October 9, 2007
                           1,100,000        19.8%           $2.60              $2.60          July 4, 2008
-------------------------------------------------------------------------------------------------------------
BRADLEY H. LANGILLE         200,000         3.6%            $1.01              $1.01          October 9, 2007
                           1,200,000        21.6%           $2.60              $2.60          July 4, 2008
-------------------------------------------------------------------------------------------------------------
GREGORY K. LILLER           25,000          0.4%            $1.01              $1.01          October 9, 2007
                            25,000          0.4%            $2.60              $2.60          July 4, 2008
-------------------------------------------------------------------------------------------------------------
TERRENCE W. COUGHLAN        15,000          0.3%            $2.60              $2.60          July 4, 2008
-------------------------------------------------------------------------------------------------------------
L. LEANNE DOWE, C.A.        10,000          0.2%            $2.60              $2.60          July 4, 2008
=============================================================================================================
Notes:
(1)  A total of 5,550,000 options were granted to directors, officers, employees
     and  consultants  during the 2003  financial  year of which  3,900,000  are
     subject to shareholder approval.  See "Section II - Business of the Meeting
     - 5. Approval of Option Grants under the Stock Option Plan".
</TABLE>


     The following table sets forth information  concerning the aggregated stock
options exercised by the executive officers of the Corporation during 2003.



                                       14
<PAGE>

<TABLE>
                   Aggregated Option Exercises during the Most Recently Completed Financial Year
                   and Financial Year-End Option Values - 2003

===============================================================================================================
                                                                                    Value Unexercised In-the
                                                          Unexercised Options at    Money Options at July 31,
                                                              July 31, 2003                   2003
                       Securities      Aggregate Value              (#)                        ($)
                       Acquired On      Realized ($)           Exercisable/               Exercisable/
Name                  Exercise (#)                            Unexercisable             Unexercisable(1)
---------------------------------------------------------------------------------------------------------------
<S>                      <C>            <C>                  <C>                        <C>
FRED GEORGE              100,000        $304,000 (2)          2,800,000/nil              $5,354,000/nil
---------------------------------------------------------------------------------------------------------------
BRADLEY H. LANGILLE      100,000        $304,000 (3)          2,100,000/nil              $3,462,000/nil
---------------------------------------------------------------------------------------------------------------
GREGORY K. LILLER           -                 -                220,000/nil                $549,146/nil
---------------------------------------------------------------------------------------------------------------
TERRENCE W.              80,000         $189,600 (4)            65,000/nil                $136,100/nil
COUGHLAN
---------------------------------------------------------------------------------------------------------------
L. LEANNE DOWE,             -                 -                 10,000/nil                 $9,400/nil
C.A.
===============================================================================================================
Notes:
(1)  On July 31, 2003,  the last trading day of the 2003 financial  period,  the
     closing price of the Common Shares on the TSX Exchange was $3.54.
(2)  Exercised on July 31, 2002, at $3.54 per share.
(3)  Exercised on July 31, 2002, at $3.54 per share.
(4)  Exercised on July 11, 2002, at $2.87 per share.
</TABLE>


Change of Control Agreements

     The  Corporation  has  no  change  of  control  agreements  with  executive
officers.

Directors' and Officers' Liability Insurance

     The Corporation,  together with its related companies,  maintains liability
insurance for the benefit of the  Corporation,  its related  companies and their
directors and officers,  as a group.  The amount of insurance  purchased in 2003
was $2,000,000  (aggregate  limit).  The policy contains a deductible  clause of
$100,000  for the  Corporation  and nil for each  director or officer,  on a per
claim basis.  In 2003, the aggregate  insurance  premium was $35,500 and did not
distinguish between directors as a group or officers as a group.

Interests of Management and Others in Material Transactions

     As of July 31, 2003, no director or executive  officer of the  Corporation,
no  security  holder  who is  known  to the  Corporation  to  own of  record  or
beneficially  hold more than 10% of Common  Shares and no associate or affiliate
of any such director,  executive officer or security holder has had any material



                                       15
<PAGE>

interest,  direct or indirect, in any transaction or in any proposed transaction
which has materially  affected or would materially affect the Corporation or any
of its subsidiaries, except as disclosed herein.

     Gammon owns  approximately  26.7% of the issued and  outstanding  shares of
Mexgold  Resources  Inc.  ("Mexgold")  as at July 31, 2003.  Mexgold is a junior
natural  resource  issuer  with its  common  shares  listed  on the TSX  Venture
Exchange under the trading  symbol,  "MGR".  Mr.  Bradley H. Langille  serves as
President  and is a director of Mexgold,  Mr.  Gregory K. Liller  serves as Vice
President Exploration and is a director of Mexgold, Ms. L. Leanne Dowe serves as
Chief  Financial  Officer  of  Mexgold,  and Mr.  Dale M.  Hendrick  serves as a
director of Mexgold. Disclosure of Auditor Fees

     During the year ended July 31,  2003,  Gammon  paid a total of  $157,500 to
Grant Thornton LLP, Chartered Accountants. The following is a description of the
fees.

     Audit Fees:  Audit fees in connection  with Grant  Thornton  LLP's audit of
     Gammon's annual financial statements and their review of Gammon's unaudited
     interim  financial   statements  included  in  Gammon's  Quarterly  Reports
     totalled approximately $118,000.

     All Other Fees:  Fees billed to Gammonby  Grant  Thornton LLP for all other
     services totalled  approximately $39,500. These fees can be sub-categorized
     as follows:

          Other Audit and Audit-Related Services:  Other audit and audit-related
          services are services performed by Grant Thornton LLP that are closely
          related to the  performance  of the audit and in many cases could only
          be provided by  Gammon's  external  auditors.  Such  services  include
          comfort  letters  and  consents  related  to  securities  registration
          statements and other capital raising  activities,  reports relating to
          Gammon's regulatory  filings,  reports relating to Gammon's compliance
          with  provisions of or  calculations  required by  agreements  and due
          diligence  pertaining to  acquisitions.  The aggregate  fees billed to
          Gammon  by  Grant  Thornton  LLP for  other  audit  and  audit-related
          services rendered to Gammon totalled approximately $29,500.

          Tax-Related  Services:  The  aggregate  fees billed to Gammon by Grant
          Thornton  LLP  for  tax-related  services,  such as tax  advisory  and
          compliance, totalled approximately $10,000.

          Other  Services:  The aggregate  fees billed by Grant Thornton LLP for
          all  other   services   rendered  to  Gammon  for   matters   such  as
          non-financial   systems   consulting  and  business  process  reviews,
          totalled approximately $nil.

Report on Executive Compensation

     The Compensation Committee of the Board of Directors considers compensation
matters as and when required.  The  Compensation  Committee  reviews and submits
recommendations  to the Board of  Directors  with  respect to the  Corporation's
executive  compensation  policies and the compensation paid to the Corporation's
executive  officers.  The  Compensation  Committee  also  reviews the design and
competitiveness of the Corporation's compensation and benefit programs generally
and has the  authority to  recommend to the Board of Directors  for its approval
amendments to, and grants pursuant to, such programs.



                                       16
<PAGE>

     Composition of the Compensation Committee

     The Compensation Committee is composed of Rudolfo Nieblas (Chair),  Terence
W. Coughlan and Dale M. Hendrick. Messrs. Nieblas and Coughlan are unrelated and
independent  members of the Board of Directors  and  therefore a majority of the
members of the  Composition  Committee  are  independent  of  management  of the
Corporation.

     Compensation Philosophy

     The Corporation's  executive compensation policy is designed to provide for
the  enhancement of Shareholder  value,  the  successful  implementation  of the
Corporation's  business plans and a link between executive  compensation and the
financial performance of the Corporation.

     The objectives of the Corporation's executive compensation policy are to:

     (a)  attract, retain and motivate executives critical to the success of the
          Corporation;

     (b)  provide fair,  competitive and cost effective compensation programs to
          its executives;

     (c)  link the interests of management with those of the Shareholders; and

     (d)  provide rewards for outstanding corporate and individual performance.

     The   Compensation   Committee   reviews  on  an  annual   basis  the  cash
compensation,  performance and overall  compensation  package for each executive
officer. It then submits to the Board of Directors  recommendations with respect
to the basic salary,  bonus and  participation in long-term  incentive plans for
each executive officer.

     Basic Salary

     In determining the basic salary of an executive  officer,  the Compensation
Committee places equal weight on the following factors:

     (a)  the particular responsibilities related to the position;

     (b)  salaries paid by comparable businesses;

     (c)  the experience level of the executive officer; and

     (d)  his or her overall performance.

     Bonus Payments

     Executive officers are eligible for annual cash bonuses,  after taking into
account and giving equal weight to, financial performance, attainment of certain
corporate objectives and individual performance.

     In taking into account the financial  performance  aspect, it is recognized
that executive  officers cannot control certain factors,  such as interest rates
and the  international  market for gold and industrial  minerals produced by the
Corporation.  When applying the financial performance criteria, the Compensation
Committee  considers  factors  over which the  executive  officers  can exercise
control, such as meeting budget targets established by the Board of Directors at
the beginning of each year,  controlling costs,  taking successful  advantage of
business  opportunities and enhancing the competitive and business  prospects of
the Corporation. There are no pre-established payout ranges.



                                       17
<PAGE>

     In 2003, bonuses were awarded to the following officers of the Corporation:
President,  in the amount of $150,000; and Chief Executive Officer in the amount
of $75,000.

     Long-Term Incentives

     The  Corporation  maintains a stock option plan,  the "Gammon  Stock Option
Plan", which has been approved by the Shareholders of the Corporation.

     During  2003,  the  Board  of  Directors,  on  the  recommendation  of  the
Compensation  Committee,  granted  stock  options to  executive  officers of the
Corporation as follows: Fred George,  Chairman & President,  was granted 800,000
stock options with an exercise  price of $1.01,  which expire on October 9, 2007
and also 1,100,000 stock options* with an exercise price of $2.60,  which expire
on July 4, 2008;  Bradley H.  Langille,  Chief  Executive  Officer,  was granted
200,000 stock options with an exercise  price of $2.60,  which expire on October
9, 2007,  and also  1,200,000  stock  options* with an exercise  price of $2.60,
which expire on July 4, 2008; Gregory K. Liller, Vice-President Exploration, was
granted  25,000 stock options with an exercise  price of $1.01,  which expire on
October 9, 2007 and also  25,000  stock  ooptions*  with an  excericse  price of
$2.60,  which  expire on July 4, 2008;  and, L.  Leanne  Dowe,  Chief  Financial
Officer,  was granted  10,000 stock  ooptions*  with an exercise price of $2.60,
which  expire on July 4,  2008.  The  exercise  price of the stock  options  was
determined  with  reference to the closing price of the Common Shares on the TSX
on the  trading  day  immediately  preceding  the date of the grant of the stock
options.  The grants of stock options marked with "*" are subject to shareholder
approval as discussed under, "Section II - Business of the Meeting - 5. Approval
of Option Grants under the Stock Option Plan".

                                       Compensation Committee of the
                                       Board of Directors of Gammon Inc.

                                       Dale M. Hendrick (Chair)
                                       Alejandro Caraveo
                                       Rodolfo Nieblas

September 22, 2003


Performance Graph

     The  following  graph shows a comparison  of the  cumulative  return of the
Corporation's publicity traded shares versus the S&P/TSX Composite Index and the
S&P/TSX Canadian Gold Index.

[See schedule F]


                        SECTION IV - CORPORATE GOVERNANCE

     Gammon believes that good corporate governance is an essential element in a
well-managed company.

     The Corporation's  corporate  governance  practices have been compared with
the TSX corporate  governance  guidelines (the "TSX Guidelines")  (including the
proposed amendments  published in April 2002 and not yet formally implemented as
of July 31,  2003) and are set out in the  "Statement  of  Corporate  Governance
Practices" attached as Schedule "A" to this Circular.



                                       18
<PAGE>

     The  Corporation has been reviewing its corporate  governance  practices in
light of the proposed  rules of the Ontario  Securities  Commission  (the "OSC")
regarding  corporate  governance matters (the "OSC Proposals").  The Corporation
has also been  reviewing  its  corporate  governance  practices  in light of the
Sarbanes-Oxley  Act of 2002 ("SOX")  enacted in the United  States and the rules
and regulations  issued and proposed to be issued by the Securities and Exchange
Commission (the "SEC") in the United States to give effect to that  legislation,
as well as the proposals  published by the New York Stock  Exchange (the "NYSE")
in relation to corporate governance  requirements for NYSE-listed companies (the
"NYSE Proposals").

     When amendments to the TSX Guidelines,  the OSC Proposals,  the SOX-related
rules and  regulations  of the SEC and the NYSE  Proposals  are  finalized,  the
Corporation  will reassess and make and any  necessary  changes to its corporate
governance practices.

     The following is a description of the  Corporation's  corporate  governance
practices.

Mandate of the Board of Directors

     The duties and responsibilities of the Board of Directors are:

     o    to  supervise  the  management  of the  business  and  affairs  of the
          Corporation; and

     o    to act with a view towards the best interests of the Corporation.

     In discharging  its mandate,  the Board of Directors is responsible for the
oversight and review of the  development  of, among other things,  the following
matters:

     o    the strategic planning process of the Corporation;

     o    identifying  the  principal  risks of the  Corporation's  business and
          ensuring the  implementation  of  appropriate  systems to manage these
          risks;

     o    succession  planning,  including  appointing,  training and monitoring
          senior management;

     o    a   communications   policy   for  the   Corporation   to   facilitate
          communications with investors and other interested parties; and

     o    the integrity of the  Corporation's  internal  control and  management
          information systems.

     The Board of Directors also has the mandate to assess the  effectiveness of
the Board of  Directors  as a whole,  its  committees  and the  contribution  of
individual directors.


Composition of the Board of Directors

     The Board of  Directors,  as proposed in this  Circular for election at the
Meeting,  will  consist of six (6) members,  of whom the Board of Directors  has
determined that three (3) are "unrelated" for purposes of the TSX Guidelines and
"independent"  for purposes of the OSC  Proposals,  SOX and the NYSE  Proposals.
These three (3) directors are Merrs. Hendrick, Caraveo and Nieblas.

Meetings of the Board of Directors

     The Board of  Directors  meets at least  once  each  calendar  quarter  and
following the annual meeting of Shareholders of the  Corporation.  The frequency
of the meetings  and the nature of the meeting


                                       19
<PAGE>

agendas are  dependent  upon the nature of the  business  and affairs  which the
Corporation  faces from time to time. In fiscal 2003, the Board of Directors met
seven (7) times.


Independence of the Board of Directors

     Mr.George is the Chairman of the Board of  Directors  and the  President of
the  Corporation.  The Board of Directors  believes  that there are  substantial
benefits to the Corporation with Mr. George serving in both of those positions.

     To facilitate the  functioning of the Board of Directors  independently  of
management, the following structures and processes are in place:

     o    members of management on the Board of Directors is limited to one-half
          of the directors;

     o    when appropriate, members of management, including Mr. George, are not
          present for the discussion  and  determination  of certain  matters at
          meetings of the Board of Directors;

     o    under the by-laws of the  Corporation,  any two  directors  may call a
          meeting of the Board of Directors;

     o    Mr.  George's  compensation  is  considered,  in his  absence,  by the
          Compensation Committee at least once a year; and

     o    in  addition to the  standing  committees  of the Board of  Directors,
          independent   committees  are  appointed  from  time  to  time,   when
          appropriate.

Committees of the Board of Directors

     The Board of Directors has four (4) standing committees:

     o    the Audit Committee;

     o    the Nominating and Corporate Governance Committee;

     o    the Compensation Committee; and

     o    the Health, Safety and Environment Committee.

     The majority of all of the  committees  are  independent  of management and
report directly to the Board of Directors.  From time to time, when appropriate,
ad hoc  committees  of the  Board of  Directors  are  appointed  by the Board of
Directors.

     Audit Committee

     The members of the Audit Committee are Messrs.  Hendrick  (Chair),  Caraveo
and Nieblas. During 2002, the Audit Committee met four (4) times.

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

     o    the integrity of Gammon's financial statements;



                                       20
<PAGE>

     o    Gammon's compliance with legal and regulatory requirements;

     o    the qualifications and independence of Gammon's independent  auditors;
          and

     o    the  performance  of the  independent  auditors and Gammon's  internal
          audit function.

     Nominating and Corporate Governance Committee

     The  members of the  Nominating  and  Corporate  Governance  Committee  are
Messrs.  Caraveo  (Chair),  Nieblas  and  Hendrick.   During  fiscal  2003,  the
Nominating and Corporate Governance met three (3) times.

     The purpose of the Nominating and Corporate Governance Committee are:

     o    to identify and  recommend  individuals  to the Board of Directors for
          nomination  as members of the Board of  Directors  and its  committees
          (other than the Nominating and Corporate Governance Committee); and

     o    to develop and  recommend to the Board of Directors a set of corporate
          governance principles applicable to Gammon.

     Compensation Committee

     The members of the  Compensation  Committee  are Messrs.  Nieblas  (Chair),
Coughlan and Hendrick.  During fiscal 2003, the  Compensation  Committee met one
(1) times.

     The purposes of the Compensation  Committee are to make  recommendations to
the Board of Directors relating to the compensation of:

     o    the members of the Board of Directors;

     o    Gammon's President and Chief Executive Officer; and

     o    Members of senior management of Gammon.

     Health, Safety and Environment Committee

     The members of the Health,  Safety and  Environment  Committee  are Messrs.
Hendrick  (Chair),  Nieblas and Langille.  During 2003.  The Health,  Safety and
Environment  Committee  was  established   subsequent  to  July  31,  2003  and,
accordingly did not meet during 2003.

     The  purposes  of the  Health,  Safety and  Environment  are to monitor the
implementation and management of the Corporation's  policies relating to health,
safety and environmental matters.

     In  particular,  the  Health,  Safety  and  Environment  Committee  has the
authority and responsibility for:

     o    ensuring   that   appropriate   and  effective   health,   safety  and
          environmental  policies and procedures are in place,  operational  and
          supported by sufficient resources;



                                       21
<PAGE>

     o    reviewing and monitoring the health, safety and environmental policies
          and  procedures  of the  Corporation  and  reporting  to the  Board of
          Directors  with any  recommendations  relating to those  policies  and
          procedures;

     o    reviewing   material   incidents   relating  to  health,   safety  and
          environmental  issues and reporting to the Board of Directors with any
          recommendations relating to those incidents;

     o    promoting and supporting  improvements  to the  Corporation's  health,
          safety and environmental record; and

     o    arranging,  implementing and overseeing environmental audits at any of
          the operations of the Corporation.

Decisions requiring Board of Directors Approval

     In addition to those matters  which,  by law, must be approved by the Board
of Directors, the approval of the Board of Directors is required for:

     o    the Corporation's annual business plan and budget;

     o    major acquisitions or dispositions by the Corporation; and

     o    transactions which are outside of the Corporation's existing business.

Shareholder Communications

     The  Board  of  Directors  has  authorized   management  to  represent  the
Corporation  in  its  communications   with  shareholders  and  members  of  the
investment community. In addition, management meets regularly with investors and
other interested  parties to receive and respond to inquiries and comments.  The
Corporation  seeks to ensure that all inquiries and concerns  receive a complete
and timely response from the appropriate member of management.

     The Board of Directors reviews the Corporation's significant communications
with investors and the public,  including the Corporation's  Annual  Information
Form,  Management's  Discussion  & Analysis,  Management  Information  Circular,
annual  audited   financial   statements  and  quarterly   unaudited   financial
statements.

Expectations of Management

     The Board of Directors has charged  management with  responsibility for the
efficient  management  of the  business and affairs of the  Corporation  and the
identification  and  proposal  of  initiatives  for the  Corporation  to  secure
opportunities  as they arise. In order for the Board of Directors to effectively
carry out its mandate,  it regularly assesses the abilities of, and communicates
those assessments to, management.

     The Board of Directors recognizes the value of direct input from management
as it serves  to  assist  the Board of  Directors  in its  deliberations.  Where
appropriate,  members of management are invited to attend  meetings of the Board
of Directors to provide their input on various matters.



                                       22
<PAGE>

                                 OTHER BUSINESS

     The  form  of  proxy  accompanying  this  Circular  confers   discretionary
authority  upon  the  persons  named  therein  with  respect  to  amendments  or
variations  to matters  identified in the Notice of the Meeting or other matters
which may properly come before the Meeting.  Management of the Corporation knows
of no matter to come  before the Meeting or of any  amendment  or  variation  to
matters identified in the Notice of the Meeting, other than the matters referred
to in the Notice of the Meeting. However, if matters not now known to management
should  properly come before the Meeting,  Common Shares  represented by proxies
solicited by management will be voted on each such matter in accordance with the
best judgment of the person voting such Common Shares.


                             ADDITIONAL INFORMATION

     The Corporation will furnish, without charge, to any Shareholder submitting
a written request, a copy of the Corporation's  annual report for the year ended
July 31, 2003 on United States  Securities and Exchange  Commission Form 40-F or
the Canadian Annual  Information  Form,  including the financial  statements and
schedules  thereto.  Such written request should be directed to the attention of
Gammon  Lake  Resources  Inc.,  202  Brownlow  Avenue,  Cambridge  2, Suite 306,
Dartmouth, Nova Scotia, B3B 1T5.


                           BOARD OF DIRECTORS APPROVAL

     The contents of this Circular and the sending  thereof to the  Shareholders
of  the  Corporation  have  been  approved  by the  Board  of  Directors  of the
Corporation.

DATED this 22nd day of September, 2003.


                                   FRED GEORGE
                                   Chairman and President







                                       23
<PAGE>

                                  SCHEDULE "A"

                   STATEMENT OF CORPORATE GOVERNANCE PRACTICES

      The Corporation's corporate governance practices are compared with the
corporate governance guidelines set out in the TSX Company Manual (including the
proposed amendments published in April 2002 and not yet formally implemented as
of July 31, 2003).


<TABLE>
                                                    Does
                                                   Gammon
TSX Corporate Governance Guidelines                 Align?          Gammon's Corporate Governance Practices
-----------------------------------                 ------          ---------------------------------------
<C>                                                <C>             <C>
1.  The board of directors of every corporation      YES            The Board of Directors has responsibility for
    should explicitly assume responsibility for                     stewardship of the Corporation by, among other
    the stewardship of the corporation.                             things, supervising the management of the
                                                                    Corporation's business and affairs, with the
                                                                    goal of enhancing shareholder value.

    As part of the overall stewardship
    Responsibility, the board of directors
    should Assume responsibility for the
    following Matters:

    a.  adoption of a strategic planning process     YES            The Board of Directors is responsible for the
        and approval of a strategic plan which                      oversight and review of the strategic planning
        takes into account,among other things,                      process of the Corporation.
        the opportunities and risks of the business;
                                                                    Strategic issues facing the Corporation are reviewed
                                                                    with management and addressed by the Board of
                                                                    Directors at its regularly scheduled meetings and
                                                                    at meetings specifically called for such purpose.

    b.  the identification of the principal risks    YES            The Board of Directors is responsible for
        of the corporation's business and                           identifying the principal risks of the
        ensuring implementation of appropriate                      Corporation's business and ensuring
        systems to manage these risks;                              implementation of appropriate systems to
                                                                    manage these risks. The Board of Directors,
                                                                    directly or through its committees, periodically
                                                                    reviews specifically identified risks. The
                                                                    Audit Committee, among other things, assists the
                                                                    Board of Director's oversight of the integrity of
                                                                    the Corporation's financial statements. The Health,
                                                                    Safety and Environment Committee, among other
                                                                    things, has the authority and responsibility
                                                                    for ensuring that appropriate and effective
                                                                    health, safely and environmental policies and
                                                                    procedures are in place, operational and
                                                                    supported by sufficient resources.

    c.  succession planning, including               YES            A key responsibility of the Board of Directors is
                                                                    overseeing and reviewing the development of
        appointing, training and monitoring                         succession planning by the Corporation.  The
        senior management;                                          Nominating and Corporate Governance Committee, among
                                                                    other things, has the authority and responsibility for
                                                                    identifying and recommending individuals to the Board of

</TABLE>



<PAGE>

<TABLE>

<C>                                                <C>             <C>
                                                                    Directors and its committees (other than the Nominating
                                                                    and Corporate Governance Committee).

    d.  a communications policy for the              YES            The Board of Directors has authorized
        corporation; and                                            management to represent the Corporation in
                                                                    its communications with shareholders and members
                                                                    of thie investment community.  Adequate structures
                                                                    are in place to ensure effective, timely and
                                                                    non-selective communications between the
                                                                    Corporation and shareholders, members of
                                                                    the investment community and securities and other
                                                                    regulatory agencies.

    e.  the integrity of the corporation's            YES           The  Board  of  Directors,  through the Audit
        internal control and management                             Committee, is responsible for the performance
        information systmes                                         of the Corporation's internal audit function.


---------------------------------------------------------------------------------------------------------------------
2.  The board of directors of every corporation       NO            As used herein, the term "unrelated director"
    should be constituted with a majority of                        means a director who is independent of
    individuals who qualify as unrelated directors                  management and is free from any interest and any
                                                                    business or other relationship which could,
                                                                    or could reasonably be perceived to, materially
                                                                    interfere with the director's ability to act with a
                                                                    view to the best interets of the Corporation,
                                                                    other than interests and relationships arising from
                                                                    shareholding.

                                                                    Based on the information provided by the nominees
                                                                    for election as directors of the Corporation,
                                                                    the Board of Directors has determined that the
                                                                    following nominees for election as directors
                                                                    are "unrelated directors":  Dale M. Hendrick,
                                                                    Alejandro Caraveo and Rodolfo Nieblas.

                                                                    These nominees constitute one-half of the six
                                                                    nominees for election as directors of the
                                                                    Corporation.  The Corporation believes
                                                                    that it has an effective balance between
                                                                    nominees who are unrelated directors,
                                                                    and those who are not.

---------------------------------------------------------------------------------------------------------------------
3.  The application of the definition of              YES           The Board of Directors, directly and through
    "unrelated director" to the circumstances                       the Nominating and Corporate Governance
    of each individual director should be the                       Committee, has the responsibility to review
    responsibility of the board of directors which                  annually the relationships, if any, between the
    has a majority of unrelated directors.  The                     Board of Directors, the Corporation and
    board of directors will also be required to                     management.
    disclose on an annual basis the analysis of
    the application of the principles supporting                    Based on the information provided by the
    this conclusion.                                                nominees for election as directors of the
                                                                    Corportion, the Board of Directors has
                                                                    determined that the following nominees for
                                                                    election as directors are "unrelated
                                                                    directors": Dale M. Hendrick, Alejandro
                                                                    Caraveo and Rodolfo Nieblas.
</TABLE>



                                       2
<PAGE>

<TABLE>

<C>                                                <C>             <C>
---------------------------------------------------------------------------------------------------------------------
4.  The board of directors of every corporation       YES           The Nominating and Corporate Governance
    should appoint a committee of directors                         Committee, among other things, has the
    composed exclusively of outside directors,                      authority and responsibility for identifying and
    a majority of whom are unrelated directors,                     recommending individuals to the Board of
    with the responsibility for proposing to the                    Directors for nomination as members of the
    full board of directors new nominees to the                     Board of Directors and its committees (other
    board of directors and for assessing directors                  than the Nominating and Corporate
    on an ongoing basis.                                            Governance Committee) and for estabilshing
                                                                    procedures for the oversight of the Board of
                                                                    Directors and its committees.

                                                                    All members of the Nominating and Corporate
                                                                    Governance Committee are "unrelated directors".

---------------------------------------------------------------------------------------------------------------------
5.  Every board of directors should implement         YES           The Nominating and Corporate Governance
    a process to be carried out by the nominating                   Committee, among other things, has the
    committee or other appropriate committee for                    authority and responsibility for developing and
    assessing the effectiveness of the board of                     recommending to the Board of Directors a set
    the board of directors as a whole, the                          of corporate governance  principles applicable
    committees of the board of directors and                        to the Corporation and for establishing
    the contribution of individual directors.                       Procedures for the oversight of the Board od
                                                                    Directors and its committees.


---------------------------------------------------------------------------------------------------------------------
6.  Every corporation, as an integral element         YES           The Nominating and Corporate Governance
    for the process of appointing new directors,                    Committee is responsible for establishing an
    should provide an orientation and education                     orientation and education program for new program for new
    program for new recruits to the board of directors.             Members of the Board of Directors.


---------------------------------------------------------------------------------------------------------------------
7.  Every board of directors should examine           YES           The Nominating and Corporate Governance
    its size an undertake, where appropriate,                       Committee is responsible for making
    a program to establish a board size which                       recommendations to the Board of Directors
    facilitates effective decision-making.                          from time to time as to changes that the
                                                                    Nominating and Corporate Governance Committee
                                                                    believes to be desirable to the size
                                                                    of the Board of Directors or any committee of
                                                                    the Board of Directors.

                                                                    The Board of Directors, based on a recommendation
                                                                    from the Nominating and Corporate Governance
                                                                    Committee, has that the present sizes of the
                                                                    Board of Directors (as proposed in this
                                                                    Circular for at the Meeting) and its
                                                                    committees are appropriate for effective
                                                                    decision-making.

---------------------------------------------------------------------------------------------------------------------
8.  The board of directors should review the          YES           The Compensation Committee, among other
    adequacy and form of the compensation of                        things, has the authority and responsibility for
    directors and ensure the compensation                           making recommendations to the Board of
    realistically reflects the resonsibilities and                  Directors relating to the compensation of
    risk involved in being a director.                              Members of the Board of Directors.


</TABLE>


                                       3
<PAGE>

<TABLE>

<C>                                                <C>             <C>
---------------------------------------------------------------------------------------------------------------------
9.  Subject to Guideline 13, committees of the        YES           A majority of the members of standing
    board of directors should generally be                          committees of the Board of Directors are
    composed of outside directors, a majority                       "unrelated directors".  The Nominating and
    of whom are unrelated directors.                                Corporate Governance Committee and the Audit
                                                                    Committee are exclusively comprised of
                                                                    "unrelated directors".  The Compensation
                                                                    Committee and the Health, Safety and
                                                                    Environment Committee are composed of a
                                                                    majority of "unrelated directors".
                                                                    Some management director representation is
                                                                    considered vital on these latter two
                                                                    committees in order to assist the flow of
                                                                    information in the dynamic environment
                                                                    in which the Corporation operates.

---------------------------------------------------------------------------------------------------------------------
10. Every board of directors should expressly         YES           The Nominating and Corporate Governance
    assume responsibility for, or assign to a                       Committee, among other things, has the
    committee of directors, the general                             authority and responsibility for developing and
    responsibility for developing the                               recommending to the Board of Directors a set
    corporation's approach to governance                            of corporate governance principles applicable
    issues.                                                         to the Corporation.

---------------------------------------------------------------------------------------------------------------------
11. The board of directors, together with the         YES           The Nominating and Corporate Governance
    Chief Executive Officer, should develop                         Committee is responsible for developing
    position descriptions for the board of                          position descriptions for the Board of Directors
    Directors and for the Chief Executive                           and the Chief Executive Officer of the
    Officer, including the definition of the                        Corporation and for delineating any limits to
    limits to management's responsibilities.  In                    management's responsibilities.
    addition, the board of directors should
    approve or develop the corporate objectives                     The Compensation Committee, in relation to
    which the Chief Executive Officer is                            the President and Chief Executive Officer,
    responsible for meeting and assess the                          is responsible for making recommendations
    Chief Executive Officer against these                           to the Board of Directors in relation to the
    Objectives.                                                     corporate goals and objectives relevant to
                                                                    the compensation of the President and Chief
                                                                    Executive Officer, evaluating the performance
                                                                    of the President and Chief Executive Officer
                                                                    in light of those goals and objectives and
                                                                    setting the President's and Chief Executive
                                                                    Officer's compensation level based on this
                                                                    evaluation.

---------------------------------------------------------------------------------------------------------------------
12. Every board of directors should implement         YES           To facilitate the functioning of the Board of
    structures and procedures which ensure                          Directors independently of management, the
    that the board of directors can function                        following structures and processes are in place:
    independently of management. The chair                          the members of management on the
    or lead director should ensure that the board                   Board of Directors do not exceed one-half
    of directors carries out its responsibilities                   when appropriate, members of management,
    effectively shich will involve the board of                     including the President and Chief Executive
    directors meeting on a regular basis without                    Officer, are not present for the discussion and
    management present and may involve assigning                    determination of certain matters at meetings of
    the responsibility for administering the board of               the Board of Directors; under the by-laws of the
    directors' relationship to management to a                      Corporation, any two directors may call a
    committee of the board of directors.                            Meeting of the Board of Directors; the
                                                                    President's and Chief Executive Officer's
                                                                    compensation is considered, in their absence, by
                                                                    the Compensation Committee at least once a year,
                                                                    and, in addition to the standing committees of the
                                                                    Board of Directors, independent committees are
                                                                    appointed from time to time, when appropriate.
</TABLE>


                                       4
<PAGE>

<TABLE>

<C>                                                <C>             <C>
---------------------------------------------------------------------------------------------------------------------
13. The audit committee of every board of             YES           All members of the Audit Committee are
    directors should be composed only of                            "unrelated directors".
    unrelated directors.

    All of the members of the audit committee                       The Board of Directors has adopted the
    should be financially literate and at least                     definitions of "financial literacy" and
    one member should have accounting or                            "accounting or related financial expertise", as
    related financial expertise.  Each board of                     set out in the practice notes of the proposed
    directors shall determine the definition of                     TSX Guidelines.  Based on information
    and criteria for "financial literacy" and                       provided to the Board of Directors, the Board
    "accounting or related financail expertise".                    of Directors  has  determined  that all members
                                                                    of the Audit Committee are "financially literate"
                                                                    and at least one member has "accounting or related
                                                                    financial expertise".

    The board of directors should adopt a                           The Board of Directors has developed a
    charter for the audit committee which sets                      charter for the Audit Committee.
    out the roles and responsibilities of the
    audit committee which should be
    specifically defined so as to provide
    appropriate guidance to audit committee
    members as to their duties.

    The audit committee should have direct                          The Audit Committee, among other things,
    communication channels with the internal                        assists the Board of Directors' oversight of
    and external auditors to discuss and review                     the performance of the Corporation's internal
    specific issues as appropriate.  The audit                      audit function.
    committee duties should include oversight
    responsibility for management reporting on
    internal control.

---------------------------------------------------------------------------------------------------------------------
14. The board of directors should implement a         YES           Each of the Audit Committee, the Nominating
    system which enables an individual director                     and Corporate Governance Committee, the
    to engage an outside adviser at the                             Compensation Committee and the Health,
    Corporation's expense, in appropriate                           Safety and Environment Committee
    circumstances.  The engagement of the                           have the authority, at the expense of the
    outside adviser should be subject to the                        Corporation, to select, retain and approve the
    approval of an appropriate committee of                         fees and other retention terms of special legal
    the board of directors.                                         counsel or other experts or consultants, as it
                                                                    deems appropriate, without seeking approval of
                                                                    the Board of Directors of management.

</TABLE>




                                       5
<PAGE>


                                  SCHEDULE "B"

                           GAMMON LAKE RESOURCES INC.

                                STOCK OPTION PLAN

1.   INTERPRETATION:

     For the purposes of this Plan, the following terms shall have the following
meanings:

     (a)  "Board" means the board of directors of the Corporation;

     (b)  "Corporation" means Gammon Lake Resources Inc.;

     (c)  "Consultant"  means  an  individual,  other  than  an  employee  or an
          executive of the issuer,  that:  (i) is engaged on an ongoing basis to
          provide bona fide consulting,  technical, management or other services
          to the issuer or to an affiliated entity of the issuer under a written
          contract  between  the  issuer  or  the  affiliated   entity  and  the
          individual or a Consultant  Company or Consultant  Partnership  of the
          individual;  and (ii) in the reasonable opinion of the issuer,  spends
          or will  spend a  significant  amount  of time  and  attention  on the
          affairs  and  business  of the issuer or an  affiliated  entity of the
          issuer;

     (d)  "Consultant Company" means, for an individual Consultant, a company of
          which the individual Consultant is an employee or shareholder;

     (e)  "Consultant  Partnership"  means,  for  an  individual  Consultant,  a
          partnership  of which the  individual  Consultant  is an  employee  or
          partner;

     (f)  "Effective Date" means the date of adoption of this Plan by the Board,
          namely October 1, 1999;

     (g)  "Eligible Person" means, subject to all applicable laws, any employee,
          Senior Officer, director, Consultant, Consultant Company or Consultant
          Partnership  of the  Corporation  or any  Subsidiary  or any  personal
          holding corporation  controlled by a Senior Officer or director of the
          Corporation  or any Subsidiary or any  registered  retirement  savings
          plans established for the sole benefit of an employee,  Senior Officer
          or director of the Corporation or any Subsidiary;

     (h)  "Insider" means:

          (i)  an insider as defined  under Section 1(1) of the  Securities  Act
               (Ontario),  other than a person who falls within that  definition
               solely by  virtue of being a  director  or  Senior  Officer  of a
               Subsidiary,  and

          (ii) an associate, as defined under Section 1(1) of the Securities Act
               (Ontario),  of any  person  who is an insider by virtue of clause
               1(h)(i) above;

     (i)  "Option"  means an option to  purchase  Shares  granted to an Eligible
          Person pursuant to the terms of the Plan;



<PAGE>


     (j)  "Outstanding   Issue"  shall  mean  the  number  of  Shares  that  are
          outstanding  immediately  prior to the  share  issuance  in  question,
          excluding  Shares issued pursuant to Share  Compensation  Arrangements
          over the preceding one-year period;

     (k)  "Participant"  means  Eligible  Persons  to  whom  Options  have  been
          granted;

     (l)  "Plan" means this stock option plan of the Corporation;

     (m)  "Senior  Officer" has the meaning  ascribed thereto in Section 1(1) of
          the Securities Act (Ontario);

     (n)  "Shares" means the common shares of the Corporation;

     (o)  "Share Compensation  Arrangement" means any stock option, stock option
          plan,  employee  stock  purchase  plan or any  other  compensation  or
          incentive  mechanism  involving the issuance or potential  issuance of
          Shares,  including a share purchase from treasury which is financially
          assisted by the Corporation by way of loan, guarantee or otherwise;

     (p)  "Subsidiary" means any company that is a subsidiary of the Corporation
          as defined under Section 1(4) of the Securities Act (Ontario); and

     (q)  "Termination  Date" means the date on which a Participant ceases to be
          an Eligible Person.

     Words  importing the singular number only shall include the plural and vice
versa and words importing the masculine shall include the feminine.

     This  Plan and all  matters  to which  reference  is made  herein  shall be
governed  by and  interpreted  in  accordance  with the laws of the  Province of
Ontario and the laws of Canada applicable therein.


2.   PURPOSE: The purpose of this Plan is to:

     (a)  encourage  ownership of the Shares by directors,  Senior  Officers and
          employees of the Corporation  and its  Subsidiaries  and  Consultants,
          Consultant  Companies and Consultant  Partnerships,  who are primarily
          responsible for the management and profitable growth of its business;

     (b)  advance the  interests  of the  Corporation  by  providing  additional
          incentive for superior performance by such persons; and

     (c)  attract  and retain  valued  directors,  Senior  Officers,  employees,
          Consultants, Consultant Companies and Consultant Partnerships.

3.   ADMINISTRATION: The Plan shall be administered by the Board. Subject to the
limitations of the Plan and the  requirements  of such  regulatory  authorities,
stock exchanges or over-the-counter markets having jurisdiction over the affairs
of the Corporation, the Board shall have the authority to:

     (a)  grant options to purchase Shares to Eligible Persons;



                                       2
<PAGE>


     (b)  determine  the  terms,   limitations,   restrictions   and  conditions
          respecting such grants;

     (c)  interpret the Plan and to adopt, amend and rescind such administrative
          guidelines and other rules and regulations  relating to the Plan as it
          shall from time to time deem advisable, and

     (d)  make  all  other  determinations  and to take  all  other  actions  in
          connection with the  implementation  and administration of the Plan as
          it may deem necessary or advisable.

     The   Board's   guidelines,   rules,   regulation,    interpretations   and
determinations  shall be  conclusive  and binding upon the  Corporation  and all
other persons.

4.   SHARES  SUBJECT  TO THE PLAN:  The  maximum  number of Shares  which may be
reserved and set aside for issue under this Plan shall be  11,500,000,  provided
that the Board shall have the right,  from time to time, to increase such number
subject  to  the  approval  of the  shareholders  of the  Corporation  and  such
regulatory  authorities,  stock  exchanges or  over-the-counter  markets  having
jurisdiction  over the affairs of the Corporation.  The maximum number of Shares
which may be reserved  for issuance to any one person under the Plan shall be 5%
of the Shares outstanding at the time of the grant (on a non-diluted basis) less
the  aggregate  number of Shares  reserved for issuance to such person under any
other  option to purchase  Shares from  treasury  granted as a  compensation  or
incentive mechanism.

     Any  Shares  subject  to an Option  which for any  reason is  cancelled  or
terminated  without  having been  exercised  shall again be available for grants
under the Plan.

5.   PARTICIPATION:  Options  shall be granted  under the Plan only to  Eligible
Persons  designated  from time to time by the Board and shall be  subject to the
approval of such regulatory  authorities,  stock  exchanges or  over-the-counter
having jurisdiction over the affairs of the Corporation.

6.   TERMS AND  CONDITIONS OF OPTIONS:  The terms and  conditions of each Option
shall include the following, as well as such other provisions,  not inconsistent
with the Plan, as may be deemed advisable by the Board including those contained
in any stock  option  agreement  entered  into  between  the  Corporation  and a
Participant:

     (a)  Option  Price:  The option  price of any Shares in respect of which an
          Option  may be  granted  shall be fixed by the  Board but shall be not
          less than the  market  price of the  Shares at the time the  Option is
          granted.  For the purpose of this  subparagraph  6(a),  "market price"
          shall be deemed to be the  closing  price as  reported  by the Toronto
          Stock Exchange,  or, if the Shares are not listed on the Toronto Stock
          Exchange,  on such other principal stock exchange or  over-the-counter
          market on which the Shares  are listed or quoted,  as the case may be,
          on the last trading day  immediately  preceding the day upon which the
          Option is granted.  If the Shares are not  publicly  traded or quoted,
          then the "market  price" shall be the fair market value of the Shares,
          as  determined  by the  Board,  on the day upon  which  the  Option is
          granted.  In the  resolution  allocating  any  Option,  the  Board may
          determine  that (i) the date of grant of the Option  shall be a future
          date determined in the manner specified in such  resolution,  in which
          case, for the purpose of this subparagraph  6(a), "market price" shall
          be deemed to be the weighted  average  trading  price of the Shares as
          reported  by the  Toronto  Stock  Exchange,  or if the  Shares are not
          listed on the Toronto Stock  Exchange,  on such other  principal stock
          exchange or over-the-counter  market on which the Shares are listed or
          quoted,  as the case may be, for the five (5) trading  days  preceding
          the date of the grant, or, if the Shares are not publicly


                                       3
<PAGE>

          traded or quoted,  then the  "market  price"  shall be the fair market
          value of the Shares, as determined by the Board, on the date of grant,
          and (ii) the date or dates of the  vesting  of the  option  shall be a
          future  date or  dates  determined  in the  manner  specified  in such
          resolution.  The Board may also  determine that the exercise price per
          share may  escalate at a  specified  rate  dependent  upon the date on
          which any Option may be exercised by the Participant.

     (b)  Payment:  The full purchase price of Shares  purchased under an Option
          shall be paid in cash or certified  funds upon the  exercise  thereof,
          and upon  receipt of payment in full,  but subject to the terms of the
          Plan, the number of Shares in respect of which the Option is exercised
          shall be duly issued as fully paid and non-assessable.  A holder of an
          Option shall have none of the rights of a shareholder until the Shares
          are issued to him.

     (c)  Term of Option:  Options  may be granted  under this Plan  exercisable
          over a period not  exceeding  five (5)  years.  Each  Option  shall be
          subject to earlier termination as provided in subparagraph 6(e).

     (d)  Exercise  of  Option:   Subject  to  the   provisions   contained   in
          subparagraph  6(e)(ii),(iii)  and  (iv),  no Option  may be  exercised
          unless the Participant is then an Eligible Person. This Plan shall not
          confer upon the  Participant any right with respect to continuation of
          employment by the Corporation. Absence on leave approved by an officer
          of the  Corporation  or of any  Subsidiary  authorized  to  give  such
          approval shall not be considered an interruption of employment for any
          purpose of the Plan.  Subject to the provisions of the Plan, an Option
          may be exercised  from time to time by delivery to the transfer  agent
          of the Corporation in Toronto of written notice of exercise specifying
          the  number  of  Shares  with  respect  to which  the  Option is being
          exercised and  accompanied by payment in full of the purchase price of
          the Shares then being purchased.

     (e)  Termination of Options:  Unless otherwise  determined by the Board, in
          its  sole  discretion,  and  as  may be  permitted  by any  regulatory
          authorities,   stock  exchanges  or  over-the-counter  markets  having
          jurisdiction  over the affairs of the Corporation,  any Option granted
          pursuant hereto, to the extent not validly  exercised,  will terminate
          on the earliest of the following dates:

          (i)  the date of  expiration  specified in the Option  agreement or in
               the resolution of the Board granting such Option, as the case may
               be,  being not more than five (5) years after the date upon which
               the Option was granted;

          (ii) immediately upon the termination of the Participant's  employment
               with the  Corporation or a Subsidiary,  where  termination is for
               cause;

          (iii)thirty (30) days after the  Participant  ceases to be an Eligible
               Person, other than by reason of retirement,  permanent disability
               or death during which thirty (30) day period the  Participant may
               exercise  the Option to the extent he was entitled to exercise it
               at the date the  Participant  ceased  to be an  Eligible  Person.
               Without   limitation,   and  for  greater  certainty  only,  this
               provision  will  apply  regardless  of  whether  the  Participant
               received  compensation in respect of dismissal or was entitled to
               a period of notice of  termination  which  would  otherwise  have
               permitted  a  greater  portion  of the  Option  to vest  with the
               Participant;

          (iv) ninety  (90) days after the date of the death of the  Participant
               during  which  ninety (90) day period the Option may be exercised
               by  the  Participant's  legal  representative  or the  person  or
               persons to whom the deceased Participant's



                                       4
<PAGE>

               rights under the Option shall pass by will or the applicable laws
               of  decent  and   distribution,   and  only  to  the  extent  the
               Participant  would have been  entitled to exercise  the Option on
               the date of death; and

          (v)  ninety  (90)  days  after   termination   of  the   Participant's
               employment by reason of permanent  disability or retirement under
               any retirement plan of the Corporation or any Subsidiary,  during
               which  ninety (90) day period the  Participant  may  exercise the
               Option to the extent he was  entitled  to exercise it at the time
               of such  termination,  provided that if the Participant shall die
               within  such  ninety  (90) day  period,  then such right shall be
               extended to ninety (90) days  following  the date of death of the
               Participant  and  shall  be  exercisable   only  by  the  persons
               described  in  clause  6(e)(iv)  hereof  and  only to the  extent
               therein set forth.

     (f)  Non-transferability  of Option:  No Option  shall be  transferable  or
          assignable by the Participant other than by will or the laws of decent
          and  distribution  and such  Option  shall be  exercisable  during his
          lifetime only by the Participant.

     (g)  Applicable  Laws or  Regulations:  The Plan, the grant and exercise of
          Options hereunder and the Corporation's obligation to sell and deliver
          Shares upon exercise of the Options shall be subject to all applicable
          federal, provincial and foreign laws, rules and regulations, the rules
          and  regulations of any stock exchange or  over-the-counter  market on
          which the Shares are listed or quoted for trading, as the case may be,
          and to such approvals by any regulatory or governmental agency as may,
          in the  opinion  of  counsel  to the  Corporation,  be  required.  The
          Corporation shall not be obligated by any provision of the Plan or the
          granting of any Option  hereunder to issue or sell Shares in violation
          of  such  laws,  rules  and  regulations  or  any  condition  of  such
          approvals.  No Option  shall be granted  and no Shares  issued or sold
          hereunder where such grant,  issue or sale would require  registration
          of  the  Plan  or  the  Shares  under  the  securities   laws  of  any
          jurisdiction and any purported grant of any Option or issue or sale of
          Shares  hereunder  in violation of this  provision  shall be void.  In
          addition, the Corporation shall have no obligation to issue any Shares
          pursuant to the Plan unless such Shares shall have been duly listed or
          quoted, upon official notice of issuance,  with all stock exchanges or
          over-the-counter  markets, as the case may be, on which the Shares are
          listed or quoted for trading.  Shares issued and sold to  Participants
          pursuant to the exercise of Options may be subject to  limitations  on
          sale or resale under applicable securities laws.

1.   ADJUSTMENTS IN SHARES SUBJECT TO THE PLAN:

     (a)  Subdivisions  and  Redivisions:  In the  event of any  subdivision  or
          redivision  of the Shares at any time while any Option is  outstanding
          into a greater  number of Shares,  the  Corporation  shall  thereafter
          deliver at the time of exercise  of any Option,  in lieu of the number
          of Shares in  respect of which  such  Option is then being  exercised,
          such greater number of Shares as would result from said subdivision or
          redivision had such Option been exercised  before such  subdivision or
          redivision  without the Participant  making any additional  payment or
          giving any other consideration therefor.

     (b)  Consolidations: In the event of any consolidation of the Shares at any
          time while any Option is  outstanding  into a lesser number of Shares,
          the Corporation  shall thereafter  deliver,  and the Participant shall
          accept,  at the time of exercise of any Option,  in lieu of the number
          of Shares in  respect of which  such  Option is then being  exercised,
          such lesser



                                       5
<PAGE>

          number of  Shares as would  result  from such  consolidation  had such
          Option been exercised before such consolidation.

     (c)  Reclassifications/Changes:  In the  event of any  reclassification  or
          change of the Shares at any time while any Option is outstanding,  the
          Corporation  shall  thereafter  deliver at the time of exercise of any
          Option  hereunder the number of securities of the  Corporation  of the
          appropriate class or classes resulting from said  reclassification  or
          change as the  Participant  would  have been  entitled  to  receive in
          respect of the  number of Shares in  respect  of which such  Option is
          then being  exercised  had such  Option  been  exercised  before  such
          reclassification or change.

     (d)  Other   Capital   Reorganizations:   In  the  event  of  any   capital
          reorganization  of the  Corporation  at any time  while any  Option is
          outstanding,   not  otherwise   covered  in  this  paragraph  7  or  a
          consolidation, amalgamation or merger with or into any other entity or
          the  sale of the  properties  and  assets  as or  substantially  as an
          entirety to any other entity,  the Participant if he has not exercised
          his Option prior to the effective date of such capital reorganization,
          consolidation, amalgamation, merger or sale, upon the exercise of such
          Option  thereafter,  shall be entitled to receive and shall  accept in
          lieu of the number of Shares  then  subscribed  for by him but for the
          same aggregate  consideration  payable  therefor,  the number of other
          securities  or  property  of the entity  resulting  from such  capital
          reorganization,  consolidation,  amalgamation,  merger or sale, as the
          case may be, that the Participant  would have been entitled to receive
          on such capital reorganization, consolidation, amalgamation, merger or
          sale if, on the record date or the effective date thereof, he had been
          the registered holder of the number of Shares so subscribed for.

     (e)  Other  Changes:  In the event  that the  Corporation  takes any action
          affecting  the Shares at any time,  other  than any  action  described
          above,  which  in  the  opinion  of  the  board  of  directors  of the
          Corporation would materially affect the rights of the Participant, the
          exercise  price or number  of Shares  issuable  upon  exercise  of any
          Option will be adjusted in such manner,  if any, and at such time,  as
          the board of directors of the Corporation  may determine,  but subject
          in all cases to any necessary regulatory and, if required, shareholder
          approval.  Failure  to  take  such  action  by  the  directors  of the
          Corporation  so as to  provide  for an  adjustment  on or prior to the
          effective date of any action by the  Corporation  affecting the Shares
          will be  conclusive  evidence  that  the  board  of  directors  of the
          Corporation  has determined that it is equitable to make no adjustment
          in the circumstances.

     (f)  The Corporation shall not be obligated to issue fractional \ Shares in
          satisfaction of its  obligations  under the Plan or any Option and the
          Participant  will not be entitled to receive any form of  compensation
          in lieu thereof.

     (g)  If at any time the Corporation grants to its shareholders the right to
          subscribe for and purchase pro rata additional securities of any other
          corporation  or  entity,  there  shall be no  adjustments  made to the
          number  of  Shares  or other  securities  subject  to the  Options  in
          consequence thereof and the Options shall remain unaffected.

     (h)  The  adjustment in the number of Shares  issuable  pursuant to Options
          provided for in this paragraph 7 shall be cumulative.

     (i)  On the  happening  of each and  every  of the  foregoing  events,  the
          applicable  provisions of the Plan and each of them shall, ipso facto,
          be deemed to be amended accordingly and



                                       6
<PAGE>

          the Board shall take all necessary  action so as to make all necessary
          adjustments  in the  number  and  kind of  securities  subject  to any
          outstanding Option (and the Plan) and the exercise price thereof.

2.   LIMITS WITH RESPECT TO INSIDERS:

     (a)  The maximum  number of Shares  which may be reserved  for  issuance to
          Insiders under the Plan or other Share Compensation  Arrangement shall
          be 10% of the Outstanding Issue.

     (b)  The maximum number of Shares which may be issued to Insiders under the
          Plan or other Share Compensation  Arrangement within a one-year period
          shall be 10% of the Outstanding Issue.

     (c)  The  maximum  number of Shares  which may be issued to any one Insider
          under  the  Plan or  other  Share  Compensation  Arrangement  within a
          one-year period shall be 5% of the Outstanding Issue.

     (d)  Any  entitlement  to acquire  Shares  granted  pursuant to the Plan or
          other Share Compensation  Arrangement prior to the grantee becoming an
          Insider  shall be excluded  for the  purposes of the limits set out in
          subparagraphs (a), (b) and (c) of this paragraph 8.

9.   FINANCIAL ASSISTANCE FOR PURCHASE OF SHARES: Subject to applicable law, the
Corporation  may, in its sole  discretion,  arrange for the  Corporation  or any
Subsidiary  to  make  loans  or  provide   guarantees  for  loans  by  financial
institutions to assist  Participants to purchase Shares upon the exercise of the
Options so granted.  Any loans granted by the  Corporation  or any Subsidiary to
assist  Participants  to purchase  Shares upon the exercise of Options  shall be
full recourse to the  Participant  and secured by the Shares  purchased with the
proceeds of the loan,  and shall be at such rates of  interest,  if any,  and on
such other terms as may be determined by the Corporation.

     The  Shares may be sold by the  Participant  at any time  provided  that an
amount  equivalent  to the option  price per Share  sold,  or the balance of the
loan, whichever is the lesser, is applied in repayment of the loan.

10.  AMENDMENT AND TERMINATION OF PLAN AND OPTIONS:  Subject in all cases to the
approval of all  regulatory  authorities,  stock  exchanges or  over-the-counter
markets having  jurisdiction over the affairs of the Corporation,  the Board may
from time to time amend or revise  the terms of the Plan (or any Option  granted
thereunder) or may terminate the Plan (or any Option granted  thereunder) at any
time provided,  however,  that no such action shall,  without the consent of the
participant,  in any manner  adversely  affect a Participant=s  rights under any
Option theretofore granted under the Plan.

11.  EFFECTIVE  DATE AND  DURATION  OF PLAN:  Subject  to  section  12, the Plan
becomes  effective on the Effective Date and Options may be granted  immediately
thereafter.  Any Options  granted  subsequent to the Effective Date but prior to
the approval of the Plan by the  shareholders of the Corporation as contemplated
in section 12 shall not be  exercisable  until such approval is obtained and, if
such approval is not obtained, such Options shall be immediately cancelled.  The
Plan shall  remain in full force and effect  until such time as the Board  shall
terminate the Plan, and for so long thereafter as Options remain  outstanding in
favour of any Participant.

12.  APPROVAL  OF PLAN:  The  establishment  of the Plan  shall  be  subject  to
approval of the shareholders of the Corporation.  All Options granted subsequent
to such approval shall not require



                                       7
<PAGE>


approval by the shareholders  unless such approval is required by the regulatory
authorities,  stock exchanges or  over-the-counter  markets having  jurisdiction
over the affairs of the Corporation.




                                       8

<PAGE>

                                  SCHEDULE "C"

                   ORDINARY RESOLUTION OF THE SHAREHOLDERS OF

                           GAMMON LAKE RESOURCES INC.



          BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

     3.   An amendment to the terms of the  Corporation's  Stock Option Plan for
          directors, officers, employees and consultants, increasing the maximum
          number of Common Shares that may be reserved for the grants of options
          under the plan from  9,125,000 to 11,500,000  Common  Shares,  as more
          particularly  described in the management  information circular of the
          Corporation  dated  September  22,  2003,  be and the  same is  hereby
          approved; and

     4.   Each of the directors and officers of the  Corporation be and they are
          hereby  authorized to do all acts and things and execute all documents
          as may be necessary  or  desirable in their  opinion to give effect to
          the foregoing.




                                       1
<PAGE>

                                  SCHEDULE "D"

                   ORDINARY RESOLUTION OF THE SHAREHOLDERS OF

                           GAMMON LAKE RESOURCES INC.



          BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

     5.   The grant of a total of  3,900,000  options  to  officers,  directors,
          employees and  consultants of the  Corporation  under the terms of the
          Corporation's Stock Option Plan, as proposed to be amended in order to
          increase the maximum  number of Common Shares that may be reserved for
          the grant of options  thereunder  from 9,125,000 to 11,500,000  Common
          Shares,   and  as  more  particularly   described  in  the  management
          information  circular of the Corporation  dated September 22, 2003, be
          and the same is hereby approved; and

     2.   Each of the directors and officers of the  Corporation be and they are
          hereby  authorized to do all acts and things and execute all documents
          as may be necessary  or  desirable in their  opinion to give effect to
          the foregoing.




                                       1
<PAGE>

                                  SCHEDULE "E"

                   ORDINARY RESOLUTION OF THE SHAREHOLDERS OF

                           GAMMON LAKE RESOURCES INC.



          BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

     1.   The  issuance by the  Corporation  in one or more  private  placements
          during the twelve month period  commencing on October 27, 2003,  2003,
          of such  number of  securities  that would  result in the  Corporation
          issuing  or making  issuable  up to  46,324,911  Common  Shares of the
          Corporation,  as is  more  particularly  described  in the  management
          information  circular of the Corporation  dated September 22, 2003, be
          and the same is hereby approved; and

     2.   Each of the directors and officers of the  Corporation be and they are
          hereby  authorized to do all acts and things and execute all documents
          as may be necessary  or  desirable in their  opinion to give effect to
          the foregoing.










                                       1






<PAGE>



                                  SCHEDULE "F"



                  GAMMON LAKE RESOURCES INC. PERFORMANCE GRAPH


The  following  graph  shows  a  comparison  of  the  cumulative  return  of the
Corporation's publicity traded shares versus the S&P/TSX Composite Index and the
S&P/TSX Canadian Gold Index.


                              [CHART IN ORIGINAL]