Gryphon Gold Corporation
TSX : GGN
OTC Bulletin Board : GYPH

Gryphon Gold Corporation

August 14, 2009 15:01 ET

Gryphon Gold Announces Financial Results for 1st Quarter Ended June 30, 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 14, 2009) - Gryphon Gold Corporation (TSX:GGN)(OTCBB:GYPH) (the "Company") reported a net loss of $395,716 or $0.01 per share for the three months ended June 30, 2009 compared to a net loss of $1,438,906 or $0.02 per share during the same period in the prior year, on greater shares outstanding. Exploration costs decreased by $409,215 as there was no exploration drilling done on the Borealis property during the current quarter. The Company continued to focus on completing the Pre-Feasibility Study while conserving cash. As a result of the cash conservation effort, management salaries and consulting fees decreased by $232,262 from the prior year's quarter.

During the quarter ended June 30, 2009:

- On April 2, 2009, the Company sold its Blue Mountain project to Nevada Geothermal for $50,000 while retaining a 2% net smelter royalty on the core claims.

- On June 4, 2009, the Company announced that it 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. On July 20, 2009 the Company announced the positive results of the Pre-Feasibility Study, which will be posted on SEDAR and filed with the SEC.

- The Company continued to stake additional properties during the quarter and completed 2 new lease or joint venture agreements. The Company believes these agreements provide additional exposure to exploration success for our shareholders, while cash received from lease payments more than offsets property holding costs.

On July 22, 2009, the Company extended and repriced 9,486,500 outstanding warrants amending the exercise price to $0.18 through September 20, 2009 and to $0.40 from September 21, 2009 through December 31, 2009.

On August 1, 2009, Terence J. Cryan was appointed to the Company's board of directors. Mr. Cryan brings to the board extensive investment banking expertise.

On August 7, 2009, the Company entered into an amendment to the option agreement on the Borealis lease, permitting the Company to extend the term of the option by six months in consideration for 966,336 common shares of the Company. Upon exercise of the option, the floating rate, net smelter return royalty ("NSR") is converted to a 5% fixed rate NSR royalty.

Exploration expenses during the three months ended June 30, 2009 were $277,453 or 63% of total expenses compared to $686,668 or 47% of total expenses in the prior year. Most of the exploration costs recognized in the current quarter were for completing all ongoing property lease payments and costs for the pre-feasibility study being performed by Telesto Nevada Inc. No exploration drilling was completed during the quarter ended June 30, 2009 nor in the prior year's comparable quarter.

Spending in all overhead cost centers (management salaries and consulting fees, general and administration, legal and audit, and travel and accommodation) decreased significantly from a total of $594,123 during the quarter ended June 30, 2008 to $180,127 during the quarter ended June 30, 2009. The 70 percent reduction in expenses reflected management's action to reduce all overhead operating costs while still continuing to complete the pre-feasibility study, a necessary step in bringing the Borealis property into production.

ON BEHALF OF THE BOARD OF DIRECTORS

JOHN KEY, CEO

GRYPHON GOLD CORPORATION

This press release contains "forward-looking information" within the meaning of Canadian and United States securities laws, which may include, but is not limited to, statements with respect to projections and expectations related to the results and projections contained in the Preliminary Assessment, the timing of delivery of the pre-feasibility study and scoping study regarding the Borealis resource, the anticipated conclusions of the pre-feasibility study and scoping study, the expected mine life, recovery, capital and other costs and anticipated production of the described open-pit oxide heap leach mine at the Borealis property, anticipated internal rate of return, availability of capital for development and the affect of the pre-feasibility study on the company's ability to raise capital for development, sensitivity to metal prices and ore grade, resource estimates on the Borealis resource, pediment exploration plans and other plans, projections, estimates and expectations. Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risks and uncertainties outlined under the section headings "Forward-Looking Statements" and "Risks Factors" in our annual report on Form 10-KSB, as filed with the SEC on June 26, 2008, as amended July 7, 2008, under the section heading "Risk Factors" in our most recent quarterly report on Form 10-Q, as filed with the SEC on February 13, 2009, as amended March 10, 2009, and in our most recent financial statements, reports and registration statements filed with the SEC (available at www.sec.gov) and with Canadian securities administrators (available at www.sedar.com). In addition, the Preliminary Assessment is the first in a series of development studies for the project assessing the potential viability of an open-pit oxide heap leach mining operation on the Borealis gold property using an estimate of metal prices based on historical and future metal prices. The operating and capital costs in the Preliminary Assessment were developed to be reasonable estimates within industry benchmarks. There is no certainty that the results of the Preliminary Assessment will ever be realized. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. We do not undertake to update forward-looking statements, except as may be required by law.

Full financial statements and securities filings are available on our website: www.gryphongold.com and www.sec.gov or www.sedar.com. The Borealis property is described in the technical report (the "technical reports") dated April 28, 2008 titled Technical Report on the Mineral Resources of the Borealis Gold Project Located in Mineral County, Nevada, U.S.A. and dated September 2, 2008 titled "Preliminary Assessment of the Mineral Resources of the Borealis Gold Project located in Mineral County, Nevada, U.S.A.", and prepared in accordance with National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101"). The technical reports describe the exploration history, geology and style of gold mineralization at the Borealis property. Disclosure in this press release of mineral resources is based on the technical report. Details of the quality or grade of each category of mineral resources and key assumptions, parameters and methods used to estimate the mineral resources is included in the technical reports. The reports also include a description of environmental and permitting matters.

The information in this press release as it relates to the pre feasibility study was reviewed by J.R. Danio, PE., Telesto Nevada Inc. of Denver, CO, a Qualified Person as defined by NI 43-101 of the Canadian Securities Administrators. Mr. Danio is considered independent of Gryphon Gold for the purposes of NI 43-101. The basis of the pre feasibility study and the qualifications and the assumption made by the author are contained in the pre feasibility study as it will be filed on www.sedar.com.

The information in this press release as it relates to the mineral resources of the Borealis property was reviewed by Dr. R. Steininger of Reno, NV, a Qualified Person as defined by NI 43-101 of the Canadian Securities Administrators. Dr. Steininger in a consulting geologist retained by Gryphon Gold is the principal author of the technical report and is considered independent of Gryphon Gold for the purposes of NI 43-101.

Without limiting the foregoing, this press release uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosures an issuer makes of scientific and technical information concerning mineral projects. All mineral resource estimates contained in this press release, including the terms "measured resources", "indicated resources" and "inferred resources", have been prepared in accordance with NI 43-101, and these standards differ significantly from the requirements of the SEC. The resource information contained in this press release is not comparable to similar information disclosed by U.S. companies. See the Cautionary Notes to U.S. Investors above.

All mineral resources have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in National Instrument 43-101, commonly referred to as NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the United States Securities and Exchange Commission (SEC) Industry Guide 7. Canadian and Guide 7 standards are substantially different and the information contained in this press release is not comparable to similar information disclosed by U.S. companies. This press release uses the terms "measured", "indicated", and "inferred" resources. We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that enable them to be categorized as mineral reserves. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally minable.

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