Gryphon Gold gets Borealis production permits

Vancouver – Gryphon Gold (GGN-T, GYPH-O) has received key permits necessary to commence production from oxide gold resources at its Borealis project in western Nevada’s Walker Lane Trend.

Both the U.S. Department of Agriculture’s Forest Service and Nevada’s Bureau of Mining Regulation and Reclamation have approved Gryphon’s operations and reclamation plans, allowing development of a heap leach operation to proceed.

Gryphon’s current Borealis feasibility study is expected to be completed later this summer and the company has initiated discussions with a number of institutions to finance development.

Several deposits in the Central zone at Borealis host a cumulative measured and indicated resource of 40.6 million tonnes grading 1 gram gold per tonne, containing about 1.25 million ozs. of gold. An additional estimated inferred resource of 31.2 million tonnes at 0.72 gram gold (containing about 730,000 ozs. of gold) is also reviewed in the 2005 study.

Deposits included in the resource study are: West Alluvial, Borealis, Crocodile Ridge, Deep Ore Flats (previously named Polaris), East Ridge, Freedom Flats, Gold View, Graben, Middle Ridge and Northeast Ridge. The resource estimate also includes previously mined material in dumps and heaps.

Gold mineralization at Borealis is hosted in a Miocene-aged volcanic sequence of andesitic flows, lahar breccias and tuffs, all underlain by a Cretaceous granodiorite. Predominant structures are a series of northeasterly-trending faults dipping steeply to the northwest in addition to a set of west-northwest striking faults. Both fault systems are on regional trends of known mineralization and appear to intersect in the Borealis area.

Gold is typically associated with vuggy silica and pyrite in the breccia zones, grading outwards to kaolinite-quartz-pyrite sequences, then to kaolinite-pyrite that is surrounded by a broad propylitic halo. Gold is generally finely disseminated in the mineralizing system and tends to be enclosed in the pyrite. Oxidation depths are variable and range from 30-to-200 metres. Transitionary-zone (mixed oxide-sulphide) mineralization from the deposits can generally also be treated as oxide-type ore in the planned heap leach operation.

Previous operations at Borealis, conducted by Houston International Minerals, Tenneco Minerals and Echo Bay Mines, resulted in the mining of about 9.7 million tonnes of ore averaging 2 grams gold from 1981 until 1990 to produce 630,000 oz. of gold. Santa Fe Pacific Mining, now part of Newmont Mining (NMC-T, NEM-N), joint ventured the project from Echo Bay in 1992 and conducted a deep drill program to test the sulphide gold mineralization potential. Despite successful results, Santa Fe terminated its JV and Echo Bay completed full site reclamation in 1994, the leaving the project in 1996. Cambior (CBJ-T, CBJ-X) optioned the project in 1996 from a private group and undertook a modest drill program only to drop it in 1998.

Gryphon Gold initially acquired its interest in 2003 and in addition to advancing development of the near surface oxide resources at Borealis, has commenced a deeper, sulphide mineralization exploration program. The company is examining potential similarities of Borealis mineralization to that at Newmont’s massive Yanacocha complex in northern Peru. A major correlation noted is the coincident gold mineralization and aeromagnetic low anomalies in relation to major hydrothermal systems.

The core portion of the claims containing the resource is subject to a sliding scale net smelter royalty (NSR) payable to the Borealis Partnership. The NSR is calculated at the price of gold divided by 100 and expressed as a percentage. (ie. at US$600 per oz. gold, the NSR would be 6%).

Given its 40.3 million shares outstanding, Gryphon Gold has a $50-million market capitalization based on its recent $1.25 trading level. The stock has a 52-week range of 91-to-$2.35.