Positive Pre-Feasibility Study for Borealis Oxide Project

 

RENO, NV - Gryphon Gold Corporation reported the receipt of a positive Pre-Feasibility Study, in accordance with Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101"), for a proposed, low-cost open-pit mine at its wholly owned Borealis Oxide Project located in the Walker Lane Belt of western Nevada.

The NI 43-101 compliant study completed by Telesto Nevada Inc. confirms a proposed five-year mine plan with estimated average annual production of more than 50,000 gold-equivalent ounces. Another 7,000 ounces of gold is estimated to be recoverable in year six, after mining ends. The initial capital and all start up costs in year one is estimated at US$22.6 million, including $14.8 million for initial capital with a 10% contingency, which equals US$87.53 per gold-equivalent ounce recovered over the life of the proposed mine.

The life-of-mine cash operating cost for the Borealis Oxide Project is estimated at US$476 per ounce of gold recovered. The project will have, if developed, a pretax net present value (NPV) of US$12.5 million at a 5% discount rate, an internal rate of return (IRR) of 27% and a 2.25-year payback period based on a gold price of US$800 per ounce.

The Pre-Feasibility Study for the Borealis Oxide Project shows a significant increase in the measured and indicated resource categories from the NI 43-101 resource estimate released in April of 2008, and the NI 43-101 preliminary assessment issued in October of 2008. The upgraded resource classification, which includes previously unused blast-hole assay data, provides sufficient measured and indicated resources to support an estimated five-year mine plan and an anticipated payback and IRR that the Company believes will establish the feasibility of the project for interested financial institutions.

The company’s address is Suite 711-675 West Hastings Street, Vancouver, BC  V6B 1N2, 888.261.2229, fax: 604.608.3262.