SOURCE: AXcess News

AXcess News

January 12, 2011 19:20 ET

AXcess News: Found Money -- Releaching Gold Heaps in America

CINCINNATI, OH--(Marketwire - January 12, 2011) -  (Companies Mentioned in this news feature are: Gryphon Gold Corp. (TSX: GGN) (OTCBB: GYPH) and AngloGold Ashanti) -- In any industry, companies are always on alert for any technologies that can provide a competitive edge. The mining industry is no different in that regard, but with the price of gold rising at an incredible pace and analysts still placing targets much higher than today's price of $1,375 per ounce, any technology or mining strategy that can produce a rapid means to extracting ore is "worth its weight in gold," so to speak.

Releaching of dump leach heaps has been steadily gaining momentum within the industry. We explored the process through an interview with Dr. Thom Seal, a metallurgical engineer, professor at the University of Nevada, Reno and expert in the field of releaching technologies. While the scientific details of the process may fall outside of the realm of the common person's level of understanding, the concept itself is much simpler. When a heap is leached, not all of it is wet evenly and as a result, gold is left behind. Modern releaching technologies have the capacity to identify dry spots and target them for residual gold. Throughout the process, injections are made internally (as opposed to the wetting of the sides and top during the typical leaching process) and the residual gold can then be extracted.

What has grabbed the attention of the mining community is the reality of how much gold is left behind. Each heap is comprised of 5 to 6 percent of stranded gold which leads to estimates that there is approximately 10 million ounces of gold stranded in dump leach pads worldwide with the number growing each day. In the United States alone, it is estimated that 144,000 ounces are stranded each year. What is particularly impressive is the speed and the cost effective manner in which the heaps can be releached with these new technologies. A typical time frame to start recovery of the stranded gold is only three to five days.

In our conversation, Dr. Seal stated, "The vast majority of gold in the United States is mined in Nevada. Using the estimate of 5 to 6 percent, a calculation can be made of approximately 100,000 ounces per year being stranded in leach heaps in that state alone." He continued, "There are more than a dozen dump leach pads that would be readily available for releaching in Nevada that could produce significant amounts of gold very quickly and efficiently."

Dr. Seal provided a recent example to show the effectiveness of the process through AngloGold Ashanti. The mining giant has recently demonstrated the lucrative gains by releaching leach heaps at its Cripple Creek Mine; producing about 5,000 additional ounces of gold in a very short time. This is gold that would have otherwise been abandoned and, at above $1,200 per ounce, generated approximately $6 million.

Gryphon Gold Corporation is focused on this releaching process in its expansive Borealis property in southwest Nevada which covers approximately 15,000 acres in Mineral County. "The releaching process is fast and efficient and independent pre-feasibility data shows it will provide capital to expand Borealis to full production as shown in our 'Road to Production' presentation," explained John Key, CEO of Gryphon. Mr. Key further stated, "Borealis contains several leach heaps and in the Freedom Flats heap, our first target, and we have confirmed that recoverable gold is present that fully supports our plan."

Coupling information from Dr. Seal with Gryphon's aggressive mining strategies in Nevada, the concept of future plans to incorporate releaching on other dump leach pads was presented in our conversation with Mr. Key. He quickly responded with statements that echoed the sentiments of Dr. Seal and the availability of potential acquisitions in the future. Mr. Key commented, "We are well-aware of several target acquisitions in close proximity to our properties. There are a minimum of 12 leach pads within a 300 mile radius of Borealis. Our strategy is to find value where it exists, either in terms of existing gold heaps or ounces in the ground."

As gold prices continue to climb with many estimates projecting levels above $1,500, investors are going to continue to flock to the precious metal as a safe haven from the volatility of the markets. Miners have, and will continue to, benefit as a result. But, much like any other company, finding ways to increase profit margins and expedite processes to generate revenues always sits on the top of the list of priorities. The releaching process appears to be a small gold mine in and amongst itself and for well-aligned companies, such as Gryphon Gold, in control of properties now and having the foresight to be prepared to exploit other leach pads in the future, the benefits should be amplified exponentially.

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