UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| FORM 40-F/A Amendment No. 1 |
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the fiscal year ended December 31, 2009 |
| Commission file number: 001-31739 |
| GAMMON GOLD INC. |
| (Exact Name of Registrant as Specified in its Charter) |
| Quebec, Canada | 1040 | Not Applicable |
| (Province or other jurisdiction of incorporation or | (Primary Standard Industrial | (I.R.S. Employer Identification No.) |
| organization) | Classification Code) |
| 1701 Hollis Street |
| Suite 400, Founders Square, PO Box 2067 |
| Halifax, Nova Scotia B3J 2Z1 |
| (Address and Telephone Number of Registrant’s Principal Executive Offices) |
| DL Services, Inc. |
| Columbia Center |
| 701 5thAvenue, Suite 6100 |
| Seattle, WA 98104-7043 |
| (206) 903-8800 |
| (Name, address (including zip code) and telephone number (including area code) of agent for service in the United States) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Name of Each Exchange On Which Registered: |
| Common shares, no par value | New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act:None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None
For annual reports, indicate by check mark the information filed with this form:
| [X] Annual Information Form | [X] Audited Annual Financial Statements |
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 137,357,552
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S] T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[ ] Yes [ ] No
EXPLANATORY NOTE
Gammon Gold Inc. (the “Company”) is filing this Amendment No. 1 to its Annual Report on Form 40-F for the fiscal year ended December 31, 2009 for the purpose of filing restated Audited Consolidated Financial Statements of the Company for the fiscal year ended December 31, 2009, including the Report of Independent Registered Chartered Accountants with respect thereto. In addition, the Company is including in this Amendment No. 1 its amended and restated Management’s Discussion and Analysis for the fiscal year ended December 31, 2009. As a result, by this Amendment No. 1, Gammon Gold is amending its Annual Report on Form 40-F for the fiscal year ended December 31, 2009 for the reasons set forth below; Exhibits 99.2, 99.3, 99.4, 99.5, 99.6, 99.7, 99.8 and 99.9 are also being refilled and are incorporated herein by reference.
The amended and restated Audited Consolidated Financial Statements included in this Amendment No. 1 have been prepared in accordance with Canadian GAAP and have been reconciled to United States GAAP in the Restated Reconciliation with United States Generally Accepted Accounting Principles incorporated by reference herein.
Other than as expressly set forth above, this Amendment No. 1 does not, and does not purport to, update or restate the information in any Item of the Annual Report on Form 40-F or reflect any events that have occurred after the Form 40-F was initially filed.
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report, a re-evaluation was carried out under the supervision of and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that re-evaluation, the CEO and the CFO have concluded that as a result of the material weakness in internal control over financial reporting described below, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to its management, including its CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
During the preparation of the March 31, 2010 interim consolidated financial statements, the Company identified an error relating to its consolidated financial statements for the years ended December 31, 2008 and 2009 and the related interim periods. As a result, as of December 31, 2009, management re-evaluated the effectiveness of the Company's internal control over financial reporting. In making this re-evaluation, management used the criteria set forth inInternal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the Company’s management assessment, management concluded that the Company’s internal control over financial reporting was not effective as at December 31, 2009 because of the material weakness described below.
The Company did not maintain effective controls over the foreign currency translation of future income taxes arising on the acquisition of an entity in a foreign jurisdiction. Specifically, the Company did not identify future income taxes arising on the acquisition of Mexgold Resources Inc. as a foreign currency liability denominated in Mexican pesos and as a result, the balance was not appropriately translated. As of December 31, 2006 the Company identified a material weakness related to insufficient accounting personnel to appropriately review and approve non-routine and complex transactions which may have contributed to the incorrect initial recording of the future income tax liability. This control deficiency resulted in the restatement of the consolidated financial statements for the years ended December 31, 2009 and 2008.
As this report is required for U.S. reporting purposes, the Company is a “foreign private issuer” as defined in Rule 3b-4 of the Exchange Act, and the Company is a “large accelerated filer”, the Company is required to provide an auditor’s report on internal control over financial reporting. The Company’s auditor has audited the Company’s internal control over financial reporting for the year ended December 31, 2009. The auditor’s report is filed asExhibit 99.5 hereto.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the period covered by this Annual Report on Form 40-F/A, no changes occurred in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company’s management, including the CEO and CFO, does not expect that its disclosure controls and procedures or internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
The Company has engaged in, and continues to engage in, efforts to address the material weakness in internal control over financial reporting identified above, by performing a thorough review of the Company’s recognition of future income tax liabilities arising on business acquisitions in accordance with generally accepted accounting principles. The Company will also amend procedures related to business acquisitions to include procedures to consider and record assets and liabilities acquired in the appropriate currency.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.
GAMMON GOLD INC.
By:/s/ Rene Marion
Rene Marion
President & Chief Executive Officer
Date: May 13, 2010
EXHIBITS
*Previously filed
