Gryphon Gold Corporation
TSX : GGN
OTC Bulletin Board : GYPH

Gryphon Gold Corporation

November 03, 2006 09:30 ET

Gryphon Reports Progress on Borealis Mine Development

Reminds warrant holders of expiry date

DENVER, COLORADO and VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 3, 2006) - Gryphon Gold Corporation (TSX:GGN)(OTCBB:GYPH) today announced significant progress on the pre-production preparations for the construction of the Borealis heap leach mine and an 'expiry' reminder to its warrant holders.

Pre-production activity: Following on the positive feasibility study (reported August 17, 2006) recommending the construction of a US$15.4 million (7,300 metric tonnes per day) 67,000+ozs per year gold and gold equivalent heap leach mine the company has:

- Received indicative term sheets for a US$12 million production loan from four international mining banks; the company has selected two of these banks to bid on the final loan facility. Technical due diligence is in process and the company anticipates a definitive term sheet from one of the two finalists by the end of this quarter. The balance of the funding will come from current cash reserves.

- Signed a letter of intent with KGL Associates of Colorado, well known mining contractors, for both the construction of the leach pads (scheduled to commence March 2007) and the mining and crushing of ore.

- Signed a letter of intent with Scotia International of Nevada, internationally recognized world leaders in recovery plant design and construction, to supply the ADR facility (gold recovery plant) on a turnkey basis.

The company is negotiating with EPCM contractors (Engineering, Procurement and Construction Management) and has begun long lead time equipment and material purchases.

Warrant reminder: A reminder to all our shareholders that the three sets of warrants currently over-hanging the market will expire on December 22, 2006. They are:

- 6,316,339 warrants exercisable at US$0.90/share for total proceeds of US$5.7 million,

- 5,956,000 warrants exercisable at C$1.15/share for total proceeds of C$6.8 million, and

- 542,250 warrants exercisable at C$0.85/share for total proceeds of C$0.5 million

These warrants are currently well 'in the money' and it is reasonable to anticipate their exercise. Proceeds of US$12.2 million from the exercise of these 12.8 million warrants will be used to finance the 2007 exploration and development budget and maintain a cash reserve during the construction and start-up period of the mine. The company encourages the warrant holders to exercise their warrants to cover these costs until the mine becomes cash flow positive in late 2007.

The major portion of a geophysical program was completed during September. It identified numerous new drilling targets within the Graben area and the outlying district. The company has been able to secure a second drill rig and crew to begin drilling the favorable outlying exploration targets in the Central Pediment and drilling continues on the extension of the Graben deposit with results expected to be reported in early December.

ON BEHALF OF THE BOARD OF DIRECTORS OF GRYPHON GOLD CORPORATION

Albert J. Matter, Chairman

Gryphon Gold is a Nevada corporation in the business of acquiring and developing gold properties in North America. Gryphon Gold's principal asset is the 27.5 square mile (1.33 million ounce Measured & Indicated) Borealis property located in the Walker Lane gold belt of western Nevada. At present the Company has 41 million shares outstanding with a net cash balance of US$6.2 million at the end of the third calendar quarter.

Full financial statements and securities filings are available on our website: www.gryphongold.com and www.sec.gov or www.sedar.com.

This press release was reviewed by Matt R. Bender, MBA, P.E., Vice President 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 our planned exploration program. 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 titled "Risk Factors and Uncertainties" in our prospectus (available at www.sedar.com) and registration statement filed with the SEC (available at www.sec.gov). 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 reserves and 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; inferred mineral resources have not been included in the corresponding economic analyses in the Feasibility Study because they 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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