Gammon Gold has lowered its cost guidance for 2010 on strong output from its Ocampo mine in northern Mexico.

The company expects cash costs for 2010 to remain at $410-$435 per gold equivalent ounce, down 3.3% from the previous guidance of $425-$450.

The Ocampo mine is expected to produce 100,000-110,000oz of gold and 4.40-4.95 million ounces of silver.

The El Cubo mine in central Mexico produced 20,596 gold equivalent ounces before operations were suspended in June.