Vancouver — Reserve and resource miscalculations in a recently completed feasibility study for Gryphon Gold’s (GGN-T, GYPH-O) Borealis project in western Nevada’s Walker Lane trend have prompted the company to defer planned heap-leach gold production from the deposit.
The company will engage an independent firm to update the resource study and National Instrument 43-101 technical report, released in mid-August, based on the miscalculations and the implications they have on recoverable gold and silver figures.
Preliminary revised estimates for the measured and indicated resource are now expected to show about a 17% drop in tonnage to about 37.1 million tonnes. Contained gold is expected to drop by 131,000 oz., around 10%, to about 1.2 million oz. while contained silver is anticipated to fall more than 10 million oz., about 56%, to around 8.45 million oz.
Recoverable gold at Borealis may be reduced by as much as 29% or 85,000 oz. (to 212,000 from 297,000 oz.) and silver could drop 48% or 1.4 million oz. (to 1.5 million from 2.9 million oz.).
Gryphon Gold is also postponing planned production financing. It had recently received term sheets for a US$12-million production loan and had short-listed two international mining banks to bid on another loan. Production was expected to begin in mid-2007.
The company has closed its Denver, Colo., office and transferred key personnel to Nevada to focus on exploration of the Borealis land package. It also reports that Allen Gordon, president, chief operating officer and director, has left Gryphon.
Following a trading halt for the news, shares of Gryphon Gold plummeted to close down 30%, or 42, at 98 apiece on volume of over 1.1 million. The stock continued to slide in subsequent trading to a new low of 76.
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