Gryphon Gold putting Borealis into production

Vancouver – With a positive feasibility study in hand for heap leach operations at its Borealis project near Hawthorne in western Nevada, Gryphon Gold (GGN-T, GYPH-O) plans to mine oxide gold reserves and place it into production.

The engineering study reviewed a 7,300-tonne-per-day open pit operation producing about 58,000 ozs. of gold and 546,000 ozs. of silver annually over an initial mine life of six years. Cash operating costs are estimated at US$264 per oz. of gold, net of silver credits.

Initial capital costs of US$15.4 million are projected for the operation that is expected to have an after-tax internal rate of return of 31%. The open pit has a modeled life of mine strip ratio of 1.4-to-1.

The study estimated proven and probable heap leachable reserves of 13.7 million tonnes grading 1 gram gold per tonne and 18.5 grams silver per tonne using gold and silver prices of US$475 and US$7.92 per oz. respectively. An additional 20.9 million tonnes of measured and indicated oxide resource has also been reviewed averaging 0.6 gram gold and 9.8 grams silver, and could extend the mine-life to 8.5 years. Estimated recovery rates for gold and silver over the six year mine life is 68.5% and 35% respectively.

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

Gryphon is in discussion with several institutions for capital requirements and is also in negotiations with a number of potential contract mining groups to operate the mine and crushing facilities. The company expects construction completion and its initial gold pour within 8-months of securing financing.

In unison with development plans, the company continues to drill test deeper sulphide mineralized gold zones along the Graben trend. The Graben sulphide deposit, not included in the feasibility study, contains 9.8 million measured and indicated tonnes of resource at 1.7 grams gold and 13.3 grams silver.

With 41 million shares outstanding, Gryphon posts a $57-million market capitalization based on its recent $1.40 trading level. The stock has a 52-week range of 91-to-$2.35.