GGN-t and SGX-v SIGN OPTION FOR JV FOR BOREALIS GOLD PROJECT NEVADA
May 3rd, 2010: Gryphon Gold starts Borealis drilling...
Message: New Outlook for GGN
Taken from Microcap.com E-letter:
Gryphon Gold (GGN.T $0.39)
After a year of watching this stock and the sector languish, an important turnaround was announced last week. The CEO, Tony Ker has resigned and been replaced with someone extremely competent. I do not wish to sound disrespectful to Mr. Ker because he has been quite ill this past year but this is very important news for us.
When I toured this Nevada property spring 2007, the potential was significant. Since that time they have increased their reserves significantly but while the junior gold sector has suffered, Gryphon has been a joke. They have been unable to move the share price "anywhere", and updates were continually delayed. Top this off with a botched merger and it was becoming painfully apparent a major shakeup was required at this company. I think we finally got it.
This new CEO is extremely well qualified to turn this situation around. I am not looking for immediate miracles but at least now we know that the odds of restoring "fair" value, are back in our favor.
Borealis (their main property) has 1.4 million ounces measured & indicated. This should be worth close to $25/oz even in a poor gold sector. If we only assign $10/oz to this (which is very low) it values that gold at $14 million. If we assign $5/oz to the 1.1 million oz. inferred (also very low), we get another $5 million.
Assigning rock bottom values on Borealis we get $19 million. This leaves a $4 million cushion for speculation on future drilling (of which there will be a lot). This also doesn't factor in the properties and gold they acquired last summer for $10 million - although I'm convinced Tony Ker overpayed for this.
This scenario uses extremely low values for the gold in the ground that has been proven to date, and leaves next to nothing for upside drilling - which makes little sense. However, in doing this we determine what our downside risk is.
Upside occurs from drilling, a production scenario on the mine, proper promotion, a jump in gold prices, or an overall recovery in the junior gold stocks.
The track record and experience of the new CEO (John Key) is impressive. Gryphon has the reserves, the exploration potential, and very experienced geologists and technicians. What they are missing is someone at the helm capable of moving this forward and restoring shareholder value. Hopefully this does the trick.
News Release
Gryphon Gold Corp. is appointing mining engineer John Key as chief executive officer and director. With more then 30 years of successfully building and operating mines, he is well qualified to lead Gryphon in the development of its two gold deposits and in following up on its recent exploration successes.
As a consultant to Gryphon Gold these past five months, Mr. Key fullfilled the objectives of establishing the economic potential for a heap leach mine from Gryphon's 700,000-ounce oxide gold resources, as well as affirming the longer-term opportunities for Gryphon's 1.8-million-ounce sulphide gold resources; both on the Borealis property in Nevada. An independent 43-101-compliant preliminary assessment study detailing the full economics of the oxide heap leach mine is nearing completion. It will be released in early September along with a 43-101- compliant independent scoping study of the sulphide gold resources mining potential.
Mr. Key has had a successful and innovative career, predominantly with Cominco and Teck-Cominco. His 30 years in the mining industry include 20 years of direct mine construction and operations management. As general manager, he was directly responsible for running, in succession, the Magmont, the Polaris and the Red Dog mines. During his six years operating the Red Dog mine, he was responsible for oversight, operating, capital and construction budgets and expansion of the world's largest zinc mine. Subsequently, he served as the general manger projects, with increased responsibilities in project development, political interaction, mining and milling techniques innovation, and personnel development.
Tony Ker, having faced significant health challenges during the past year, is resigning as CEO. The board wishes to thank Mr. Ker for having led Gryphon through these past two difficult years in the junior mining industry.
When I toured this Nevada property spring 2007, the potential was significant. Since that time they have increased their reserves significantly but while the junior gold sector has suffered, Gryphon has been a joke. They have been unable to move the share price "anywhere", and updates were continually delayed. Top this off with a botched merger and it was becoming painfully apparent a major shakeup was required at this company. I think we finally got it.
So to make the long story short, the best news we could see right now is someone new running this company. If the outlook for gold is indeed as strong as Hambro forecasts, then the time to get this company under proper control is now. They have significant reserves, strong drill potential, and the valuation on the gold (shown below) appears to leave little risk at these levels.
This new CEO is extremely well qualified to turn this situation around. I am not looking for immediate miracles but at least now we know that the odds of restoring "fair" value, are back in our favor.
Low Ball Valuation using $10/Oz and $5/Oz Gold
At $0.45 and with 62 million shares out, the market values this company at $28 million. They have $5 million in the bank so valuation on the reserves is $23 million.
At $0.45 and with 62 million shares out, the market values this company at $28 million. They have $5 million in the bank so valuation on the reserves is $23 million.
Borealis (their main property) has 1.4 million ounces measured & indicated. This should be worth close to $25/oz even in a poor gold sector. If we only assign $10/oz to this (which is very low) it values that gold at $14 million. If we assign $5/oz to the 1.1 million oz. inferred (also very low), we get another $5 million.
Assigning rock bottom values on Borealis we get $19 million. This leaves a $4 million cushion for speculation on future drilling (of which there will be a lot). This also doesn't factor in the properties and gold they acquired last summer for $10 million - although I'm convinced Tony Ker overpayed for this.
This scenario uses extremely low values for the gold in the ground that has been proven to date, and leaves next to nothing for upside drilling - which makes little sense. However, in doing this we determine what our downside risk is.
Upside occurs from drilling, a production scenario on the mine, proper promotion, a jump in gold prices, or an overall recovery in the junior gold stocks.
The track record and experience of the new CEO (John Key) is impressive. Gryphon has the reserves, the exploration potential, and very experienced geologists and technicians. What they are missing is someone at the helm capable of moving this forward and restoring shareholder value. Hopefully this does the trick.
News Release
Gryphon Gold Corp. is appointing mining engineer John Key as chief executive officer and director. With more then 30 years of successfully building and operating mines, he is well qualified to lead Gryphon in the development of its two gold deposits and in following up on its recent exploration successes.
As a consultant to Gryphon Gold these past five months, Mr. Key fullfilled the objectives of establishing the economic potential for a heap leach mine from Gryphon's 700,000-ounce oxide gold resources, as well as affirming the longer-term opportunities for Gryphon's 1.8-million-ounce sulphide gold resources; both on the Borealis property in Nevada. An independent 43-101-compliant preliminary assessment study detailing the full economics of the oxide heap leach mine is nearing completion. It will be released in early September along with a 43-101- compliant independent scoping study of the sulphide gold resources mining potential.
Mr. Key has had a successful and innovative career, predominantly with Cominco and Teck-Cominco. His 30 years in the mining industry include 20 years of direct mine construction and operations management. As general manager, he was directly responsible for running, in succession, the Magmont, the Polaris and the Red Dog mines. During his six years operating the Red Dog mine, he was responsible for oversight, operating, capital and construction budgets and expansion of the world's largest zinc mine. Subsequently, he served as the general manger projects, with increased responsibilities in project development, political interaction, mining and milling techniques innovation, and personnel development.
Tony Ker, having faced significant health challenges during the past year, is resigning as CEO. The board wishes to thank Mr. Ker for having led Gryphon through these past two difficult years in the junior mining industry.
2 Recommendations
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