Lease Agreement On Hole In The Wall Property

 

VANCOUVER, BC - Gryphon Gold Corporation reported that Nevada Eagle Resources, a wholly owned subsidiary of Gryphon Gold, has entered into a lease agreement whereby Newmont Mining Corporation ("Newmont") has agreed to undertake exploration and development, if warranted, of Nevada Eagle's Hole In The Wall property, located on the southeastern extent of the Lovelock-Austin Mineral Belt.

The Hole in the Wall property consists of 30 unpatented lode mining claims covering approximately 245 hectares (600 acres) and is located 40 kilometers (25 miles) northeast of Austin, Nevada or 56 kilometers (35 miles) south of the Cortez Hills Deposit operated by Barrick Gold.

Recently collected and analyzed surface rock samples contain up to 3,880 parts per billion (3.88 g/t) gold, with associated anomalous arsenic (maximum of 3900 ppm), antimony (maximum of 41 ppm) and mercury (maximum of 15 ppm). The Au-As-Sb geochemical anomaly is about half a mile wide and about one mile long. The grades from the surface sampler are not indicative of drilling results, and should be considered to be conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the Hole in the Wall property being delineated as a mineral resource.

The lease agreement requires annual preproduction royalty payments of $15,000 at time of signing and escalating to $25,000 by year three 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 and any future NSR royalty payments received by Nevada Eagle are payable to Douglas R. Bowden a private individual who jointly holds the claims with Nevada Eagle. During the lease period, Newmont is responsible for all claim holding costs.

Gryphon Gold is a Nevada focused gold exploration and potentially a production company. Its principal gold resource, the 1.4 million ounce (measured and indicated) and 1.1 million ounce (inferred) Borealis deposits, 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 Golden Arrow property (leased to Nevada Sunrise Gold Corp.) contains a NI 43-101 compliant resource of 296,500 ounces of gold (measured and indicated) and 50,400 inferred ounces of gold.

The company’s address is Suite 711-675 West Hastings Street, Vancouver, BC V6B 1N2, 888.261.2229, fax: 604.608.3262.