TORONTO (Reuters) - Capital Gold CGC.A, a New York-based gold miner with operations in northern Mexico, said on Tuesday it had ended talks on being taken over by Timmins Gold TMM.V, paving the way to being bought by Gammon Gold GAM.TO after months of speculation.

Capital CGC.TO said its board had reviewed the Timmins all-stock proposal, and determined it was not superior to a $288 million cash and stock offer from Gammon Gold.

Capital Gold's board already recommended the Gammon offer to shareholders in December.

Gammon offered in October to acquire Capital Gold, seeking to bolster its Mexico-focused gold portfolio.

Capital owns the El Chanate gold mine in Sonora Mexico as well as the Orion development project in the Nayarit province. Gammon owns the Ocampo and El Cubo properties in Mexico.

Capital Gold shares rose 0.83 percent in Toronto to C$4.84 per share, while Gammon Gold shares rose 1.59 percent to C$7.66 per share.

Timmins stock was up 3.5 percent to C$2.38 per share after trading as high as C$2.41 a share.

(Reporting by Pav Jordan; editing by Janet Guttsman)