Gryphon Gold provides operational update
Monday, Mar 04, 2013
Gryphon Gold Corporation (the "Company" or "Gryphon Gold") (TSX:GGN)(OTCQB:GYPH), a company focused on its joint venture interest in the gold Borealis Oxide Heap Leach Project in Nevada (the "Borealis Property"), provided an operational update as of February 28, 2013.
James T. O'Neil Jr., CEO and Interim CFO of Gryphon Gold, commented, "The restart in production and the addition of our joint venture partner has allowed investments to continue in an effort to expand production capacity at the Borealis Property. The additional crushing capacity and heavy earth moving equipment will allow us to not only stack ore on the pad more quickly, but also add fresh ore to be processed."
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.