I chose Gammon Gold (NYSE: GRS) as my No. 1 stock pick for 2011 because I detected a powerful turnaround story in the making, and the Gammon team has already surpassed my expectations on multiple fronts.

Year-to-date, the stock is handily outperforming competitors from all tiers of the gold patch -- including formidable, expanding producers Goldcorp (NYSE: GG), Yamana Gold (NYSE: AUY), and New Gold (AMEX: NGD). Since Gammon produces substantial volumes of silver as a by-product of gold production, targeting 4.8 million to 5.6 million silver ounces for 2011, I also find it interesting that Gammon shares are likewise outperforming noteworthy silver success stories Silver Wheaton (NYSE: SLW) and Alexco Resource (AMEX: AXU). 

Following a whirlwind of activity that has yielded an entirely new company -- even prompting a new company name (see below) -- I was fortunate to have the opportunity to speak with CEO Rene Marion this week about the gamut of exciting developments unfolding. A partial transcript of our exchange is presented below for your Foolish consideration:

Christopher Barker: A golden trifecta of positive exploration results, Gammon's victory in the strategic acquisition of Capital Gold, and surging cash flow amid 34% production growth from Ocampo in the first quarter have all contributed to Gammon's noteworthy success so far in 2011. Could you outline some of the specific catalysts or targeted achievements that investors can look for to sustain some of this remarkable momentum?

Rene Marion: Great question! That is the most compelling part of our story: the value opportunity yet to be realized. While we have outperformed our peers (both gold and silver producers), we still have a number of catalysts that can drive further rerates. We have production contribution from the recently acquired El Chanate mine coming in Q2. We are very encouraged by the progress we have made implementing strategic productivity enhancements. We already have increased pit tonnage by almost 70% over last year, and we are currently de-bottlenecking the crushing and stacking circuit. We will continue to study and evaluate opportunities to ramp up to even higher productivity levels. A second catalyst for rerate is the resumption of production at our El Cubo mine targeted for Q3. We began mining activities on May 1st, ahead of our original schedule, and fully expect to be processing ore in Q3 (at which time we will have three operating mines in full production). We are ramping up production tonnages at El Cubo to achieve a targeted level of 1,800 tpd of in-situ ore by Q2 next year. Looking forward to future production, and another catalyst for a rerate, is the release of a preliminary economic assessment for our advanced development property -- Guadalupe y Calvo -- that we anticipate coming into production in 2013. Combined with our successful exploration program, this company has a great future.

Barker: With abundant compelling resource plays in Mexico to choose from, which factors contributed most to your selection of Capital Gold as an acquisition target?

Marion: The El Chanate mine is a simple operation with great upside potential and an impressive operations team that is excited by the opportunities and synergies the combined companies provide. We have been able to immediately implement a number of operational enhancements, and we have only been managing this operation since April 8th. Not only are there operational enhancement opportunities that should result in cost reductions later this year, this asset has been largely underexplored so we have also launched an initial drilling program as well.

Barker: Your most recent corporate update (page 15) lays out a "strategic pyramid" for exploration and development activities in 2011 that features an aggressive 171,000 meters of diamond drilling among your three producing camps at Ocampo, El Cubo, and the newly acquired El Chanate. Could you break down for us how many drilling rigs will operate at each property and where you believe the greatest organic reserve growth potential resides among the three?

Marion: In 2010, approximately 82% of our drilling efforts were at our existing operations, with the vast majority of that focused at our Ocampo mine (near and around our existing infrastructure). That strategic focus in 2010 has resulted in a pre-depletion increase of 18% in reserves and a 47% increase in measured and indicated resources companywide. The majority of those ounces were high-margin mill ore at Ocampo, our cornerstone asset. Currently, we have nine drills companywide, but we are increasing our drilling fleet at Ocampo to nine underground rigs and six surface rigs. We have one at El Chanate, increasing to two in the second half of the year. One drill will be on-site at El Cubo soon and a few more at our grassroots projects.

Barker: Gammon's enticing exploration success at Guadelupe y Calvo would seem to place the property at the pinnacle of the company's development pipeline, but Capital Gold had previously hatched plans to fast-track development at your newly acquired Orion property. Which project is the higher priority? Which project is likely to enter production first, and are you in a position to offer a preliminary timeline for the two?

Marion: Our current focus is on our Guadalupe y Calvo project in Chihuahua State, as we continue to advance a PEA on that property that targets late 2013 production. We are getting up to speed on the Orion project, and we are currently reviewing the data in order to develop our plan of action. Orion is a large land package in Nayarit state, yet only a small portion has been explored so far. We want to better understand the potential of the entire land package while concurrently developing the asset. Our first priority was to hit the ground running at El Chanate and then to address Orion in the second half of 2011.

Barker: As a long-term investor, I am particularly intrigued by the strategic options secured last year for the Venus and Los Jarros exploration properties; which flank your flagship Ocampo property to the north and east and surround Agnico-Eagle Mines' (NYSE: AEM) highly successful Pinos Altos operation. Could you touch upon the prospectivity of those properties as potential expansions of the Ocampo camp on a district scale, and where those properties stand as relative priorities within what is now a stacked portfolio of early stage exploration properties?

Marion: We are very excited by the prospectivity of our expanded land package. With 126 km lineal veining mapped to date in the region, it compares very favorably with other mining districts in Mexico, such as the Pachuca-El Chico, Guanajuato, Tayoltita-San Dimas, and other mining districts. We have budgeted $7 million to $9 million for exploration at our grassroots properties, with $4 million to $5 million focused on Venus and Los Jarros. In only 6 months of work, we have already announced the discovery of the Gaby project at Los Jarros, and on the Venus property we have encountered some very high grades within the La Balleza vein, located only 3km from the Ocampo property boundary.

Barker: I have maintained for several years now what I feel are appropriately conservative expectations that gold will reach $2,000 per ounce and silver will strike $100 during this ongoing secular bull market for precious metals. Could you discuss your own outlook for gold and silver prices and indicate whether you find my targets overly ambitious, reasonable, or overly conservative?

Marion: Well, it was only a few months ago that I predicted gold at $1,500 by September. I am very happy to say I was wrong, and we are above that target now in May. So, where from here? If gold holds above $1,400 through the summer, I do not believe that $2,000 is unrealistic by year end. The prospects for Silver remain strong in the shorter term as well. I do believe that maintaining a 40:1 gold to silver ratio is reasonable so $50 or better is my conservative view.

Barker: Just this week, you announced that Gammon Gold will change its name to AuRico Gold (pronounced oh-REE-koh) effective June 13, and that the stock's ticker symbol will change to "AUQ" accordingly. What's behind the change to AuRico Gold?

Marion: We are a forward-looking management team, and we are focused on where we are going. As you will soon see on our 2010 annual report cover, our new theme is "Building a Culture of Excellence." We are really a new management team, and we have accomplished a great deal in just a few years. We truly are a new company, with three operating mines, two development projects, a solid portfolio of exploration assets, and we can manage these assets out of cash flow. So changing the name just repositions the company for a new and very exciting future. I might also add that getting the gold equivalent ticker on both exchanges (AUQ) was a stroke of good fortune.

Barker: As you may be aware, here at The Motley Fool, we like to mix plenty of good-natured fun into our discussions of investment opportunities. For example, I am told that my Captain America nickname for Nucor CEO Dan DiMicco had a bit of staying power. So, in honor of your company's looming name change, and the smooth path to success charted under your leadership, may we have your blessing to endearingly refer to you as the Rico Suave of gold mining CEOs?

Marion: Thanks, but I think we need to find a name that incorporates the entire team -- as I am leading one of the best teams in the industry, and CEOs can only do a great job when they have a strong team behind them.