Pre-Feasibility Study for Gryphon Gold's Borealis Oxide Resources

 

RENO, NV - Gryphon Gold Corporation reported that the company is moving forward with a pre-feasibility study for mine development on the oxide portion of its Borealis gold resource property in Nevada, which consists of 1,422,500 Measured and Indicated ounces of gold (M&I) and 1,104,500 Inferred ounces of gold (Infd.). The study is being prepared by Telesto Nevada Inc. of Reno entirely on a deferred fee basis to facilitate moving forward prior to completion of the financing required for mine construction and development.

The pre-feasibility study is the next step toward completing the company's long-range plan. The plan anticipates cash flow generated through a mining operation used to fund a program of drilling for high-grade zones within two additional large, high sulphidation systems discovered under the pediments in 2007, as defined in the company's NI 43-101 Technical Report on the Mineral Resource dated April 28, 2008. As well, the plan calls for completion of technical work to confirm the feasibility of a sulphide mine.

"We are moving forward with the at-risk pre-feasibility study on the Borealis deposit because we believe that the results will assist Gryphon Gold to begin financing and mine development," says Telesto Nevada president John Welsh. The estimate for the deferred fee is $130,000 and is due upon successful financing of the project.

In September 2008, Gryphon Gold released a Preliminary Assessment produced by Telesto Nevada, accessing the potential economics of an open pit, heap leach mining operation and the processing of 350,000 ounces of gold yielding 232,000 ounces of recovered gold. This five-year plan indicated that the project had an unlevered internal rate of return at 26 per cent assuming a US$775 per ounce gold price. The Preliminary Assessment indicated that at defined operating costs, for every one per cent change in the price of gold, the projected internal rate of return changed by 1.7 per cent.

As well, an independent scoping study was commissioned to determine the potential of mining the sulphide gold resource which consists of 1,085,000 M&I ounces of gold and 715,000 Infd. ounces of gold at an average grade of 0.044 ounces per ton (opt). The scoping study was delayed in line with the company's cash conservation plan and will be re-instituted when cash flow is available.  "We're very optimistic that the pre-feasibility study will lead to our ability to raise the capital to put a mine into production on this property that has been a strong gold producer historically and shows so much promise for the future," says Gryphon Gold CEO John Key.

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