Gryphon Gold Corporation (TSX:GGN)(OTCBB:GYPH) a gold exploration,
development and production company focused on the Borealis project
in Nevada today provided a review of the financial results for its
fiscal 2012 third quarter ended December 31, 2011, and an update on
the Borealis Project. Unless otherwise indicated, all dollars
amounts are in United States dollars.
James T. O'Neil Jr., Interim CEO for Gryphon Gold Corp. noted,
"We are encouraged with the progress we are making on our Borealis
Project by overcoming the initial issues we had faced with our
start up. We have addressed our pumping issues and are now on track
to advancing our production through the leach process with the
addition of an in-line booster pump. The booster pump should enable
us to achieve design flow requirements for moving leach solution
onto the pad. In addition, construction of the Adsorption
Desorption Recovery ("ADR") plant is expected to be completed in
early March and is expected to be operational by the end of March.
We continue to find ways to reduce costs and control cash
requirements as we work toward the production and sale of gold to
fund operations. For example, we are reviewing all of our contracts
and outsourced services and have renegotiated or cancelled several
contracts."
He added, "During February thus far, we have shipped loaded
carbon containing approximately 500 ounces of gold."
The Borealis Project is coming back on track to return the
historic heap leach operations to production using previously mined
dumps and heaps which is expected to be provide approximately ten
to twelve months of production. Gryphon Gold plans to expand its
exploration and development of the previously identified ore bodies
once sufficient cash is generated from production.
THIRD QUARTER FISCAL 2012 FINANCIAL RESULTS
For the three months ended December 31, 2011, Gryphon Gold
reported a net loss of $1,155,027, or $0.006 per share, from
continuing operations compared with a net loss of $655,013, or
$0.007 per share, from continuing operations in the same period in
the prior year. Construction of the project began in June 2011 and
the leaching cycle began in late September 2011 with the first
shipment of loaded carbon in October 2011.
During the third quarter a total of 199,674 tons of material was
placed on the heap leach pad for processing. The material was
estimated to contain 6,223 ounces of gold and estimated to recover
approximately 2,800 ounces of gold. The Company sold loaded carbon
containing 605 ounces of gold compared with no sales in the same
period of the previous year. The approximate average settlement
price was $1,700 per ounce of gold.
During the quarter ended December 31, 2011, the Company had an
exploration refund of $26,394 as a result of a refund of $63,920
from the Bureau of Land Management for claim maintenance fees,
which were expensed in the prior year. Reduced exploration expenses
when compared with exploration expenses of $115,930 in the third
quarter fiscal 2011 were the result of redirected resources towards
the commencement of production. A majority of those costs incurred
were capitalized as construction in progress.
Salaries and consulting fees in the fiscal 2012 third quarter
were $364,297 compared with $303,421 incurred in the same period
the prior year primarily due to non-cash compensation expense
related to stock options increasing $39,577.
Interest expense, net of capitalized interest, was $381,212 in
the quarter ended December 31, 2011 compared with $123 in the same
period in the prior year on higher debt levels.
YEAR-TO-DATE DECEMBER 31, 2011 FINANCIAL RESULTS
For the nine months ended December 31, 2011, the Company had a
loss from continuing operations of $2,542,949, or $0.014 per share,
which was equivalent to its net loss for the period. For the
nine-month period of fiscal 2011, the Company had a loss from
continuing operations of $2,495,617, or $0.028 per share, and net
income of $635,708 or $0.007 per share, from discontinued
operations. Total loss per share for the fiscal 2011 nine-month
period was $0.021.
During the nine months ended December 31, 2011, a total of
243,970 tons of material was placed on the heap leach pad for
processing. The material was estimated to contain 7,886 ounces of
gold and estimated to recover approximately 3,548 ounces of gold.
We sold loaded carbon containing 605 ounces of gold compared with
no sales in same period of the previous year. The approximate
average settlement price was $1,700 per ounce of gold.
Exploration expenses during the nine months ended December 31,
2011 were $68,860 compared with $694,358 in the prior year. The
decrease was due to Company resources being redirected towards
commencement of production, with a majority of those costs incurred
being capitalized as construction in progress.
Salaries and consulting fees in the nine months ended December
31, 2011 were $836,465 compared with $845,552 incurred in the 2010
nine-month period. Total non-cash compensation expense due to the
recognition of costs related to stock options was $181,401 fiscal
2011 nine-month period, compared with $142,022 in the nine months
ended December 31, 2010.
Interest expense, net of capitalized interest, was $466,814 in
the nine months ended December 31, 2011 compared with $997 in the
same period in the prior year.
ADVANCING TOWARD PRODUCTION: CORPORATE OUTLOOK
As of December 31, 2011, the Company had cash on hand of $1.3
million. This declined to $310,000 as of February 17, 2012, but was
up from $250,000 as of February 2, 2012 when cash balances were
last reported. As a result of a new gold on carbon sale agreement,
Gryphon Gold anticipates receiving additional payments from loaded
carbon shipped in the month of February and which is expected to
contain approximately 500 ounces of gold. In addition, the Company
is exploring interim financing arrangements.
Mr. O'Neil concluded, "We are encouraged with the improvements
in operations we have been able to achieve in the last few weeks
and believe we will be in a position of sufficient financial
strength to complete the ADR, as we work to improve the leach
process and pregnant solution builds up on the heap leach pad.
Clearly, we have to balance the sale of loaded carbon with our need
for sufficient carbon to process through the ADR as it comes on
line. Importantly, the heap leach process is now moving toward
design capacity. From the time the ADR comes on line, we anticipate
that there will be an 8 to 12 day period for the stripping process
and conversion to dore. Once converted, the gold dore will be
shipped to a refiner where it is assayed and refined for
determination of gold content and sale value. Our focus continues
to be on achieving positive cash flow as soon as possible."
THIRD QUARTER CONFERENCE CALL
The Company will host a conference call to discuss its results
and progress in advancing the Borealis project on Friday, February
24, 2012 at 4:30 p.m. ET.
The teleconference call can be accessed by dialling (201)
689-8560.
A telephonic replay will be available from 7:30 p.m. Eastern
Time the day of the teleconference until Friday, March 2, 2012. To
listen to a replay of the call, dial (858) 384-5517 and enter
replay pin number 389536.
ABOUT GRYPHON GOLD:
Gryphon Gold is in the business of acquiring, exploring, and
developing gold properties in the United States, emphasizing the
State of Nevada. The Company's primary focus is on the advancement
of its Borealis property, located in Nevada's Walker Lane Gold Belt
(the "Borealis Property"). The plan for the Borealis Property is to
advance the development of the oxide heap leachable gold and silver
to the production stage and to further expand and develop the
significant sulphide resource through exploration, metallurgical
design and sulphide project permitting and development. The
Borealis Property is unpatented mining claims (including claims
leased to the Company's wholly owned subsidiary) of approximately
20 acres each, totaling about 15,020 acres, which has successful
past production.
Safe Harbor Statement
This press release contains "forward-looking statements" and
"forward-looking information" within the meaning of United States
and Canadian securities laws, which may include, but are not
limited to, statements relating to the Company's assessment of
improvements to its leach process, anticipated cost reductions,
timing of its ADR plant construction, control of its cash
requirements, estimates of gold loaded on carbon, expected
production using historic dumps and heaps and support of production
to satisfy cash requirements, anticipated payments from previously
shipped loaded carbon, expected financial strength to complete the
ADR, estimated processing time of the ADR and their statements that
are not historical facts. Such forward-looking statements and
forward-looking information reflect our current views with respect
to future events and are subject to certain risks, uncertainties
and assumptions, including, the risk that additional financing may
be required and, if so, may not be available on terms satisfactory
to the Company if at all, risks associated with mining operations,
and the risks and uncertainties outlined under the section headings
"Forward-Looking Statements" and "Risks Factors and Uncertainties"
in the Company's annual report on Form 10-K for the year ended
March 31, 2011, and interim report on Form 10Q for the period ended
December 31, 2011, as filed with the SEC and Canadian securities
administrators and in the Company's other reports, documents, and
registration statements filed with the SEC (available at
www.sec.gov) and with Canadian securities administrators (available
at www.sedar.com). 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. The Company does not
undertake to update forward-looking statements or forward-looking
information, except as may be required by law. Full financial
statements and securities filings are available on the Company's
website: www.gryphongold.com and www.sec.gov or www.sedar.com.
Contacts: Gryphon Gold Corporation James T. O'Neil Jr. CFO and
Interim CEO 1-775-883-1456joneil@gryphongold.com Gryphon Gold
Corporation Lisanna Lewis Vice President, Treasurer
1-604-261-2229llewis@gryphongold.com www.gryphongold.com