Preliminary Assessment Supports Initial 46,000 ozs/yr

VANCOUVER, BC - Gryphon Gold Corporation reported the positive results of an independent NI 43-101 compliant Preliminary Assessment on the oxide portion of its 2.5 million ounce Borealis gold resource in Nevada, as prepared by Telesto Nevada Inc. of Reno in collaboration with Knight Piesold Consulting & Co.
The current Borealis gold resource is in two distinct deposits:
¥ The Oxide deposit is a 725,000 oz gold resource consisting of 340,000 Measured and Indicated ounces (contained in 15.6 million tons grading 0.022 opt) and 385,000 Inferred ounces (contained in 26.8 million tons grading 0.014 opt).
¥ The Sulphide deposit is a 1.8 million ounce gold resource with 1,085,000 M&I ounces (contained in 21.0 million tons grading 0.05 opt) and 715,000 ounces of Infd (contained in 22.5 million tons grading 0.03 opt).
The independent Preliminary Assessment (PA) of the oxide resource estimates a 46,000 oz/year open-pit oxide heap leach gold mine with an initial mine life of 5 years. This initial mine plan provides for mining of only 356,000 ozs (246,000 M&I and 110,000 inferred contained in 11.7 million tons grading 0.04 opt) of the total 725,000 ozs oxide resource, with estimated recovery of 232,000 ozs in the first 5 years.
The mine plan contemplated by this PA has been specifically designed to optimize the cash flow, and the removal of the oxidized material immediately above and adjacent to the Graben sulphide gold deposit, in the initial three years of operation. This is intended to improve access to the much larger 1.8 million oz sulphide resource (1,085,000 M&I, 715,000 inferred), and provide funding for its development.
Once this has been completed, an alternative oxide mining plan will be prepared incorporating the remaining 369,000 ozs (94,000 M&I and 275,000 inferred) of oxide resources. Drilling to extend the mine life is planned to start once positive cash flow has been achieved. The inclusion of these additional 369,000 ozs in the mine plan is expected to extend the oxide mine's life provided feasibility is established for the mining of this additional resource.
The PA incorporates the very latest costs, with fuel priced at its recent peak. It is anticipated that, as the design and construction of the mine are optimized, there will be some improvement on these results. The PA used a gold price of US$775/oz, and a silver price of US$12.00/oz (65:1).
The PA accounts for all taxes, the cost of exercising the option to reduce the royalty, and is based on 100-per-cent equity financing of the development budget. The possible use of debt financing would further improve the projected Internal Rate of Return (IRR). The PA represents an as yet unoptimized design for the leachable gold deposit, with two-stage crushing and conventional carbon adsorption extraction at 5,500 tons per day.
As a result of the very successful 2007 exploration program, whereby Gryphon increased the total resources of the Borealis to 2.5 million ounces from the previously reported 1.8 million ounces (a 39% increase), an Independent Scoping Study was commissioned to determine the economic viability of mining these sulphide resources. The Scoping Study of the 1.8 million ounce sulphide gold resource (with 1,085,000 M&I and 715,000 inferred) is anticipated to be completed by early October.
It is expected to affirm the potential of a 100,000 oz/yr open-pit sulphide gold mine with an initial estimated mine life of 12 years. The extraction of the sulphide gold resource is planned for start-up in the third year after the oxide mine has attained commercial production. The current oxide mine plan is designed to improve the economics for accessing the adjacent sulphide resources.
The company's address is Suite 810-1130 W. Pender St., Vancouver, BC V6E 4A4, 888.261.2229, fax: 604.608.3262.