Additionally, as part of its operating agreement with Waterton, Gryphon Gold is responsible for the payment of $4.0 million to the joint venture to compensate Borealis for obligations incurred prior to the formation of the joint venture. In total, Waterton is expected to advance $5.6 million to Gryphon to cover the Company's initial capital contributions, of which $4.0 million has already been advanced to the joint venture. This is scheduled to be repaid on or before July 31, 2013. Interest on the capital contributions not repaid by Gryphon Gold by this date will accrue at an annual rate of 10% for the first month, 20% for the next two months, 30% for the following month and 40% for the last two months. If the cash calls are not met by August 1, 2013, the Company will be diluted by up to 25%, bringing down its ownership interest to 9.8% if it does not make any monthly installment payments under the senior credit facility or any of the cash calls up to that point.
ABOUT GRYPHON GOLD:
Gryphon Gold holds a 40% joint venture interest in the gold producing Borealis Property, which is located in Nevada's Walker Lane Gold Belt. The Company and its joint venture partner Waterton Global Value L.P. are expanding the Borealis Property production capacity and advancing the development of the oxide heap leachable gold and silver historically identified that includes both pre-processed and unprocessed ore. The Borealis Property contains 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.
Gryphon Gold routinely posts news and other important information on its website: www.gryphongold.com.
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 projected production rates, expected capital contribution, plans to advance the development of the Borealis property and future advances. 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 risks associated with the possible dilution of Gryphon's interest in Borealis if it is unable to meet its capital contribution or loan repayment obligations, risks associated with mining operations, risks associated with the installation and operation of new equipment, risks associated with the reduction in revenue from operations for the periods referred to in this release; risks associated with Gryphon's limited capital resources, risks associated with the oxide heap, risks associated with exploration, metallurgical design and project permitting and development and the risks and uncertainties outlined under the section headings "Forward-Looking Statements" and "Risks Factors and Uncertainties" in the Annual and Quarterly Reports, 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.
Gryphon Gold Corporation
James T. O'Neil Jr.
CEO and Interim CFO
Kei Advisors LLC
Craig P. Mychajluk
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