Gryphon Gold Corporation report that Nevada Eagle Resources, a wholly owned subsidiary of Gryphon Gold, entered into a lease agreement whereby Newmont Mining Corporation has agreed to undertake exploration and development, if warranted, of Nevada Eagle’s Scraper property, located on the northern extension of Nevada’s prolific Carlin trend.
The Scraper property consists of 33 unpatented lode mining claims covering approximately 270 hectares (660 acres) and is 72 kilometers (45 miles) north of Battle Mountain, Nevada.
The Scraper property, on the northern extension of the Carlin trend, is marked by a long alignment of horsts which expose Paleozoic sedimentary rocks at the surface along a narrow N30W trending belt. Paleozoic sedimentary rocks are exposed on one of these large rectangular horsts just north of Scraper.
Rock samples on surface contain up to 797 parts per billion (0.80 g/t) gold, and the gold is accompanied by anomalous arsenic (maximum of 875 ppm), antimony (maximum of 16 ppm) and mercury (maximum of 24.6 ppm). The Au-As-Sb anomaly is bordered on three sides by strong mercury anomalies, all characteristic of Carlin type gold deposits. The Au-As-Sb geochemical anomaly is about half a mile wide and about one mile long.
Gold values ranging from 0.01 to 0.03 opt have been found at the surface and in the subsurface in both Tertiary volcanics and in covered Paleozoic sedimentary rocks. The gold anomaly overlies a faulted horst of late Paleozoic strata.
The lease agreement requires annual preproduction royalty payments of $10,000 at time of signing and escalating to $20,000 by year four 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 received by Nevada Eagle are payable to Sedi-met, a privately held exploration company that jointly holds the claims with Nevada Eagle. Nevada Eagle is required to share 50% of NSR royalty payments with Sedi-met, at the 3% royalty rate, but is not obligated to share any of the incremental benefit should the NSR royalty rate rise above 3%. During the lease period, Newmont is responsible for all claim holding costs.
Gryphon Gold is a Nevada focused, gold exploration company. Its principal gold resource, the 1.4 million (measured and indicated) and 1.1 million (inferred) ounce Borealis deposit, 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 principal properties have a cumulative 900,000 of historical ounces of gold (the historical estimates are based on internal reports prepared by prior owners prior to February 2001 and were not prepared in accordance with CIM NI 43-101 standards and thus their reliability has not been verified). A number of Nevada Eagle’s principal properties are subject to joint venture or farm in agreements in favor of third parties.