Gryphon Gold Corporation
TSX : GGN
OTC Bulletin Board : GYPH

Gryphon Gold Corporation

October 09, 2008 17:32 ET

Gryphon Gold Enters Lease with Newmont on Scarper Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 9, 2008) - Gryphon Gold Corporation (TSX:GGN)(OTCBB:GYPH) is pleased to report that Nevada Eagle Resources, a wholly owned subsidiary of Gryphon Gold, entered into a lease agreement whereby Newmont Mining Corporation ("Newmont") has agreed to undertake exploration and development, if warranted, of Nevada Eagle's Scraper property, located on the northern extension of Nevada's prolific Carlin trend.

The Scraper property consists of 33 unpatented lode mining claims covering approximately 270 hectares (660 acres) and is 72 kilometers (45 miles) north of Battle Mountain, Nevada.

The Scraper property, on the northern extension of the Carlin trend, is marked by a long alignment of horsts which expose Paleozoic sedimentary rocks at the surface along a narrow N30W trending belt. Paleozoic sedimentary rocks are exposed on one of these large rectangular horsts just north of Scraper.

Rock samples on surface contain up to 797 parts per billion (0.80 g/t) gold, and the gold is accompanied by anomalous arsenic (maximum of 875 ppm), antimony (maximum of 16 ppm) and mercury (maximum of 24.6 ppm). The Au-As-Sb anomaly is bordered on three sides by strong mercury anomalies, all characteristic of Carlin type gold deposits. The Au-As-Sb geochemical anomaly is about half a mile wide and about one mile long.

Gold values ranging from 0.01 to 0.03 opt have been found at the surface and in the subsurface in both Tertiary volcanics and in covered Paleozoic sedimentary rocks. The gold anomaly overlies a faulted horst of late Paleozoic strata.

The lease agreement requires annual preproduction royalty payments of $10,000 at time of signing and escalating to $20,000 by year four and each year thereafter. If the property is placed into production, a variable rate, net smelter return (NSR) royalty is payable to Nevada Eagle. The variable rate escalates from 3% at a gold price of US$850 per ounce or less, to a maximum rate of 5.5% if the price of gold exceeds US$1,200 per ounce. Half of the preproduction royalty payments received by Nevada Eagle are payable to Sedi-met, a privately held exploration company that jointly holds the claims with Nevada Eagle. Nevada Eagle is required to share 50% of NSR royalty payments with Sedi-met, at the 3% royalty rate, but is not obligated to share any of the incremental benefit should the NSR royalty rate rise above 3%. During the lease period, Newmont is responsible for all claim holding costs.

Gryphon Gold is a Nevada focused, gold exploration company. Its principal gold resource, the 1.4 million (measured and indicated) and 1.1 million (inferred) ounce Borealis deposit, is located in the Walker Lane gold belt of western Nevada. The Borealis gold system is one of the largest known volcanic-hosted high-sulphidation gold bearing mineralized systems in Nevada. Nevada Eagle Resources, a wholly owned subsidiary, has approximately 54 highly prospective gold properties located in desirable gold trends in Nevada. Nevada Eagle's principal properties have a cumulative 900,000 of historical ounces of gold (the historical estimates are based on internal reports prepared by prior owners prior to February 2001 and were not prepared in accordance with CIM NI 43-101 standards and thus their reliability has not been verified). A number of Nevada Eagle's principal properties are subject to joint venture or farm in agreements in favor of third parties.

ON BEHALF OF THE BOARD OF DIRECTORS OF GRYPHON GOLD CORPORATION

John L. Key, CEO

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 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. The technical report describes the exploration history, geology and style of gold mineralization at the Borealis property.

This press release was reviewed by Dr. R. Steininger of Gryphon Gold, a Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators. This press release contains "forward-looking information" which may include, but is not limited to, statements with respect to anticipated exploration and, if warranted, development of the Scraper property, anticipated royalties payable under the option agreement, resource estimates, projections, and other undertakings by Newmont, in which Gryphon Gold has little control. 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 in our most recent financial statements and reports and registration statement filed with the SEC (available at www.sec.gov) and with Canadian securities administrators (available at www.sedar.com). 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.

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. 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. We do not undertake to update forward-looking statements.

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