Gryphon Gold Corporation Borealis Mining Company Canadian NI 43-101 Preliminary Assessment of the Mineral Resources of the Borealis Gold Project Located in Mineral County, Nevada, USA September 2, 2008 Prepared

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Title: Gryphon Gold Corporation Borealis Mining Company Canadian NI 43-101 Preliminary Assessment of the Mineral Resources of the Borealis Gold Project Located in Mineral County, Nevada, USA September 2, 2008 Prepared
Date: 10/7/2008
Industry: Gold and Silver Sector: Basic Materials

Gryphon Gold Corporation
Borealis Mining Company
Canadian NI 43-101
Preliminary Assessment of the Mineral
Resources
of the Borealis Gold Project Located in
Mineral County, Nevada, USA

September 2, 2008

Prepared by:

John R. Danio, P.E.
Senior Associate
Telesto Nevada, Inc.
Reno, Nevada
Telephone: 775-853-7776

In association with:

Roger C. Steininger, Ph.D., CPG
Chief Consulting Geologist
Gryphon Gold Corporation
Reno, Nevada
Telephone: 775-742-6333

Steve Wolff
Mining Engineering Consultant
Sugar Land, Texas
Telephone: 281-494-6973

Steven D. Craig, CPG
Vice President - Exploration
Gryphon Gold Corporation
Hawthorne, Nevada
Telephone: 775-945-5300

Jaye T. Pickarts, P.E.
Knight Piésold and Co.
Denver, Colorado
Telephone: 303-629-8788

Kim Drossulis
Senior Mine Engineer
Telesto Nevada, Inc.
Reno, Nevada
Telephone: 775-853-7776

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Gryphon Gold Corporation
Borealis Mining Company
Canadian NI 43-101
Preliminary Assessment of the Mineral Resources
Of the Borealis Gold Project Located in
Mineral County, Nevada, USA

*Table of Contents*
1.0 Executive Summary			1
	1.1 Introduction		1
		1.1.1 Terms of Reference	1
		1.1.2 Principal Contributions to this Preliminary Assessment	2
		1.1.3 Basis of Study	2
	1.2 Project Description and Location		3
		1.2.1 Land Status and Ownership	4
		1.2.2 Royalty	5
	1.3 Access, Climate, Local Resources, and Infrastructure		6
	1.4 Property History		6
	1.5 Geology and Mineralization		8
	1.6 History of Exploration Activities		10
	1.7 Drill Hole Database		12
	1.8 Sample Preparation, Analysis, and Security		13
		1.8.1 Historical	13
		1.8.2 2004 Program	13
		1.8.3 2005 Through November 2007 Program	15
	1.9 Data Verification		16
	1.10 Adjacent Properties		17
		1.11 Mineral Processing and Metallurgical Testing	18
		1.11.1 Metallurgical Testing	18
		1.11.2 Processing	19
	1.12 Mineral Resource Estimates		20

		*Table of Contents (Continued)*
		1.12.1 Mineral Resource Model	20
	1.13 Other Important Considerations		24
		1.13.1 Permitting	24
	1.14 Financial Model Results		25
	1.15 Conclusions and Recommendations		26
2.0 Introduction and Terms of Reference			28
3.0 Reliance on Other Experts			32
4.0 Property Description and Location			34
	4.1 Location		34
	4.2 Study Area Boundaries		35
	4.3 Property Description and Ownership		35
		4.3.1 General Property Description	35
		4.3.2 Ownership, Purchase Agreement, and Mining Lease	36
		4.3.3 Royalty	37
5.0 Accessibility, Climate, Local Resources, Infrastructure, and Physiography			38
	5.1 Access		38
	5.2 Climate and Physiography		38
	5.3 Existing Site Conditions, Infrastructure, and Available Services		38
6.0 History			42
	6.1 History of the District		42
	6.2 Past Production		44
	6.3 Borealis Property Development Background		44
	6.4 Previous Mineral Resource Estimates		46
7.0 Geologic Setting			50
	7.1 Introduction		50
	7.2 Regional Geology		50
	7.3 Local Geology		52
	7.4 Miocene and Younger Rocks		53
	7.5 Structure		55
8.0 Deposit Types			57
	8.1 Hydrothermal Gold Deposits		57
	8.2 Graben Breccias		59

		*Table of Contents (Continued)*
	8.3 Gold in Alluvium		60
9.0 Mineralization			61
	9.1 Introduction		61
	9.2 Oxidized Gold Mineralization		61
	9.3 Gold-Sulfide Mineralization		62
10.0 Exploration			65
	10.1 Introduction		65
	10.2 Historical Exploration		65
		10.2.1 Borealis Extension Deposit	66
		10.2.2 Graben Deposit	66
		10.2.3 North Graben Prospect	67
		10.2.4 Sunset Wash Prospect	67
		10.2.5 Boundary Ridge/Bullion Ridge Prospect	68
		10.2.6 Central Pediment (Lucky Boy) Prospect	68
	10.3 Activities Planned to Expand Mineralized Zones and Explore Prospects		69
		10.3.1 Area Geophysical Surveys	69
		10.3.2 Applied Reflectance Spectroscopy and Geochemical Analyses	71
		10.3.3 Freedom Flats Section	72
		10.3.4 Central Graben Section	73
		10.3.5 Conclusions and Recommendations	73
11.0 Drilling			76
	11.1 Gryphon Gold Drilling		76
	11.2 Historical Drill Hole Database		76
12.0 Sampling Method and Approach			78
	12.1 General		78
		12.1.1 Freedom Flats Example	79
	12.2 Sampling of Existing Heaps and Dumps – Spring 2004		80
	12.3 Drill Hole Database for Mineral Resource Model		80
13.0 Sample Preparation, Analysis, and Security			82
	13.1 Previous Mining Operations and Exploration		82
		13.1.1 Analysis and Quality Control	82
		13.1.2 Security	83

iii

		*Table of Contents (Continued)*
	13.2 Heap and Dump Drilling and Sampling Program - Spring 2004		83
		13.2.1 Sampling, Analysis, and Quality Control - Heap and Dump Drilling	83
		13.2.2 Security	86
	13.3 2005 Through Late-2007 Reverse Circulation Drilling		86
		13.3.1 2005-2007 Analytical Program	87
		13.3.2 Outside Lab Check	88
		13.3.3 Change of Labs	88
	13.4 QC/QA Conclusions		88
14.0 Data Verification			89
	14.1 Historical Drill Hole Data		89
	14.2 Semi-Quantitative Check Sampling		89
	14.3 Data Base Verification		90
15.0 Adjacent Properties			91
16.0 Mineral Processing and Metallurgical Testing			93
	16.1 Introduction		93
	16.2 Metallurgical History		93
	16.3 Previous Metallurgical Investigation		94
	16.4 Current Metallurgical Investigation		95
		16.4.1 Sample Description	95
		16.4.2 Bottle Roll Tests	96
		16.4.3 Column Test work	96
	16.5 Reagent Consumption		98
	16.6 Summary of Results		98
	16.7 Bulk Density and Tonnage Factor		100
	16.8 Heap Leach Processing Alternatives		102
		16.8.1 Heap Leach Plus Gravity	102
		16.8.2 Heap Leach Plus Gravity (Screen out the Low Grade)	103
17.0 Mineral Resource Estimate			104
	17.1 Introduction		104
	17.2 Optimization Analysis		104
	17.3 Existing Heaps, ROM COG		105
	17.4 Mineral Resources		105

		*Table of Contents (Continued)*
	17.5 Pit Design Parameters		106
	17.6 General Statement		107
		17.6.1 Independent Review	107
	17.7 Mineral Resource Model		108
		17.7.1 Resource Block Model Size and Location	108
		17.7.2 Drill Hole Data	110
		17.7.3 Compositing	117
		17.7.4 Topographic Data and Models	117
		17.7.5 Geologic Model for the Thickness of the QAL and TCV Formations	118
		17.7.6 Model of the Depth of Oxidation and Partial Oxidation	120
		17.7.7 Grade Zone Models and Basic Statistics	120
		17.7.8 Variograms	126
		17.7.9 Grade Estimation and Mineral Resource Classification	127
		17.7.10 Comparison of Mineral Resource Estimates to Previous Production	134
		17.7.11 Summary of Model Results	134
	17.8 Mineable Resources		141
	17.9 Mineral Resources from Existing Heaps and Stockpiles		144
	17.10 Mine Plan		148
18.0 Other Relevant Data and Information			149
	18.1 Permitting		149
	18.2 Permit Summary		149
	18.3 Background and Status of Permits		151
		18.3.1 Approved Plan of Operations	151
		18.3.2 Water Pollution Control Permit (WPCP)	152
		18.3.3 Reclamation Permit	153
		18.3.4 Closure Plans	154
		18.3.5 Air Quality Permit	154
		18.3.6 Storm Water Permit	155
		18.3.7 Spill Prevention, Control, and Countermeasure Plan (SPCC)	155
		18.3.8 Emergency Release, Response, and Contingency Plan (ERRCP)	155
		18.3.9 Threatened and Endangered Species Act	156
		18.3.10 Historical Preservation Act	156

		*Table of Contents (Continued)*
		18.3.11 Water Rights	157
	18.4 Other Minor Permits and Authorizations		157
	18.5 Other Information		159
19.0 Interpretation and Conclusions			160
	19.1 Geology		160
	19.2 Geophysics		160
	19.3 Gold Deposits		160
	19.4 Mineral Resources		161
	19.5 Mining		161
	19.6 District Exploration		161
20.0 Recommendations			164
21.0 References			165
22.0 Certificate of Author			169
23A Additional Requirements for Development Properties			179
	23A.1 Mining Operations		179
	23.2A Contract Mining		181
		23A.2.1 Maintenance and Fuel Storage Facilities	181
		23A.2.2 Explosive Storage	181
		23A.2.3 Mine Personnel	181
		23A.2.4 Blasting Design	181
		23A.2.5 Grade Control Procedures	182
		23A.2.6 Stockpiles and Waste Dumps	183
		23A.2.7 Ore Dilution	183
	23A.3 Organization		183
		23A.3.1 General Management	184
		23A.3.2 Finance and Accounting	184
		23A.3.3 Human Resources	184
		23A.3.4 Purchasing and Materials Management	184
		23A.3.5 Public Relations	184
		23A.3.6 Environmental and Permitting	184
		23A.3.7 Health and Safety	185
		23A.3.8 Corporate Support	185

		*Table of Contents (Continued)*
		23A.3.9 Emergencies	185
		23A.3.10 Compensation Plan Structure	185
		23A.3.11 Training	185
23B Recoverability			186
	23B.1 Introduction		186
	23B.2 Site Layout Considerations		187
	23B.3 Process Description		187
		23B.3.1 Design Criteria	187
		23B.3.2 Crushing, Screening, and Agglomeration	188
		23B.3.3 Heap Leaching	188
		23B.3.4 ADR Process Plant	188
		23B.3.5 Reagents	189
		23B.3.6 Utilities	189
	23B.4 Plant Operation and Instrumentation		190
	23B.5 Plant Services		190
		23B.5.1 Mobile Equipment	190
		23B.5.2 Building	190
		23B.5.3 Assay/Metallurgical Laboratories	190
	23B.6 Process Personnel		191
		23B.6.1 Salaried Staff	191
		23B.6.2 Hourly Staff	191
	23B.7 Heap Leach Pad and Pond Design		191
		23B.7.1 Introduction	191
		23B.7.2 Heap Leach Pad Grading Plan	191
		23B.7.3 Heap Leach Pad Liner System	191
		23B.7.4 Process Component Monitoring System	193
		23B.7.5 Loading Plan	194
		23B.7.6 Recycle/Storm Water Pond LCRS	194
		23B.7.7 Water Balance	195
		23B.7.8 Monitoring Wells	196
	23B.8 Infrastructure		197
		23B.8.1 Site Access	197

vii

			*Table of Contents (Continued)*
		23B.8.2 Site Improvements		197
		23B.8.3 Office, ADR Change House and Office, Assay Laboratory		197
		23B.8.4 Water Supply Distribution		198
		23B.8.5 Power Distribution		198
		23B.8.6 Process Area		198
		23B.8.7 Crushing Area		198
			23B.8.7.1 Water Well Location	199
			23B.8.7.2 Control System Architeture	199
			23B.8.7.3 Crushing Plant	199
			23B.8.7.4 The ADR Facility	199
			23B.8.7.5 Motor Control Stations	199
			23B.8.7.6 Plant Instrumentation	200
		23B.8.8 Haul Roads		200
		23B.8.9 Perimeter Roads		200
		23B.8.10 Fire Protection		200
		23B.8.11 Fencing and Access		200
		23B.8.12 Propane		200
		23B.8.13 Site Radios		201
		23B.8.14 Site Phones		201
23C Markets				202
23D Contracts				203
23E Reclamation and Closure				204
	23E.1 Introduction			204
	23E.2 Surface Reclamation and Revegetation Plan			204
		23E.2.1 Soils and Soil Availability for Reclamation		204
		23E.2.2 Surface Reclamation		204
		23E.2.3 Revegetation		205
		23E.2.4 Heap Leach Pads		205
		23E.2.5 Storage Ponds and ADR Plant		206
		23E.2.6 Open Pits		206
		23E.2.7 Waste Rock Facilities		206
		23E.2.8 Roads and Drainages		207

viii

		*Table of Contents (Continued)*
		23E.2.9 Exploration Activities	208
		23E.2.10 Buildings and Infrastructure	208
	23E.3 Monitoring and Reporting		209
	23E.4 Reclamation Schedule and Cost		209
	23E.5 Reclamation and Closure Risk		210
23F Taxes and Royalties			211
	23F.1 Production Royalty		211
	23F.2 Nevada Net Proceeds Tax		212
	23F.3 Mineral County Sales Tax		212
	23F.4 Nevada and Federal Income Tax		212
23G1 Capital Cost Estimate			213
	23G1.1 Introduction		213
	23G1.2 Basis of Estimate		213
		23G1.2.1 Cost Areas	214
		23G1.2.2 Indirect Costs	215
	23G1.3 Contingency		215
	23G1.4 Summary		215
	23G1.5 Owners Cost		216
	23G1.6 Exclusions, Clarification, and Qualifications		217
		23G1.6.1 Exclusions	217
		23G1.6.2 Clarifications and Qualifications	217
23G2 Operating Cost Estimate			218
	23G2.1 Introduction		218
		23G2.1.1 Mining	218
	23G2.2 Crushing, Agglomeration, and Heap Stacking		220
	23G2.3 Processing		221
		23G2.3.1 Labor	221
	23G2.4 Reagents		221
	23G2.5 Consumables		222
	23G2.6 Processing Cost Summary		222
	23G2.7 General and Administrative (G & A)		223
	23G2.8 Operating Cost Summary		223

		*Table of Contents (Continued)*
23G3 Project Execution			227
	23G3.1 Engineering, Procurement and Construction Management		227
	23G3.2 Procurement Plan		227
		23G3.2.1 Purchasing	227
		23G3.2.2 Expediting	228
		23G3.2.3 Inspections	228
		23G3.2.4 Traffic and Logistics	228
	23G3.3 Engineering		228
		23G3.3.1 Electrical, Control Systems, and Instrumentation	229
		23G3.3.2 Structural Design	229
	23G3.4 Project Schedule		230
	23G3.5Construction Labor Force		230
	23G3.6 Start-up and Commissioning		231
23H Economic Analysis			232
	23H.1 Introduction		232
	23H.2 Production Schedule and Assumptions		232
	23H.3 Sales and Revenue		232
	23H.4 Cash Flow Projections		232
		23H.4.1 Capital Costs	233
		23H.4.2 Sustaining Capital	233
		23H.4.3 Owner's Costs	233
		23H.4.4 Working Capital	233
		23H.4.5 Operating Costs	234
	23H.5 Depreciation, Taxes, and Royalties		234
	23H.6 Sensitivities		234

*List of Tables*

*Table*	*Title*

1.1	Estimated Gold Recovery	19

1.2	Borealis Mineral Resource Estimate – March 2008, Summary of Measured and Indicated Mineral Resource – Combined Oxide and Mixed	22

1.3	Borealis Mineral Resource Estimate – September 2008, Summary of Inferred Mineralization – Combined Oxide and Mixed Material	23

1.4	Borealis Project March 2006 Mineral Resource Estimate, Summary of Indicated Resource in Heaps	23

1.5	Borealis Project March 2006 Mineral Resource Estimate, Summary of Inferred Resource in Heaps and Dumps	24

6.1	Reported Past Borealis Production, 1981-1990	44

6.2	Comparison of Historical Post-Mining Resource Estimates	48

13.1	Analytical Results of Bulk Sample from Road Cut Midway Between Top and Bottom of Heap 2	85

13.2	Summary of Analytical Results from Bulk Standard Used in Quality Control Program, Accepted Value 0.019 opt Au	85

13.3	Summary of Assay Analyses for the Same Sample by American Assay Laboratories and ALS Chemex	85

13.4	Comparison of Heap 1 Assay Results with Previous Sampling Program	86

14.1	Results of Selective Check Sampling at Borealis	90

16.1	Summary Metallurgical Results, Scoping Bottle Roll Tests Borealis Composites – Phase 1	95

16.2	Gold and Silver Recoveries	99

16.3	Alteration and Grade for Bulk Density Samples	101

16.4	Bulk Densities for Resource Estimation	102

17.1	Mine COG Parameters	105

17.2	Existing Heaps, ROM COG	105

*List of Tables (Continued)*

*Table*	*Title*

17.3	Mineable Resources by Ore Type at $775 per ounce Gold	25

17.3	Mineable Resources by Ore Type at $775 per ounce Gold	106

17.4	Pit Design Parameters	106

17.5	Block Model Dimensions and Location Parameters (Main Area)	108

17.6	Block Model Dimensions and Location Parameters (West and East Areas)	110

17.7	Summary of Drill Hole Sample Statistics for Drill Holes Intersecting the Mineralized Zones	112

17.8	Geologic Formation Model..	119

17.9	Geologic Oxidation State Model	120

17.10	Summary of Basic Gold Grade Composite Statistics by Deposit (Inside Grade Zones)	121

17.11	Gold Grade Variogram Summary	126

17.12	First Pass (Measured) Search and Weighing Parameters for Inverse Distance Estimation	128

17.13	Second Pass (Indicated) Search and Weighing Parameters for Inverse Distance Estimation	129

17.14	Third Pass (Inferred) Search and Weighing Parameters for Inverse Distance Estimation	130

17.15	Comparison of Mined-Out Portions of Resource Model to Reported Production	134

17.16	Borealis Mineral Resource Estimate - March 2008 Summary of Measured and Indicated Mineral Resource - Combined Oxides and Sulfides	135

17.17	Borealis Mineral Resource Estimate - March 2008 Summary of Measured and Indicated Mineral Resource - Oxide Material	136

17.18	Borealis Mineral Resource Estimate - March 2008 Summary of Measured and Indicated Mineral Resource - Partially Oxidized Material.	137

xii

*List of Tables (Continued)*

*Table*	*Title*

17.19	Borealis Mineral Resource Estimate - March 2008 Summary of Measured and Indicated Mineral Resource - Sulfide Material	138

17.20	Borealis Mineral Resource Estimate - March 2008 Summary of Inferred Mineral Resource - Combined Oxides and Sulfides.	139

17.21	Borealis Mineral Resource Estimate - March 2008 Summary of Inferred Mineral Resource - Oxide Material	139

17.22	Borealis Mineral Resource Estimate - March 2008 Summary of Inferred Mineral Resource - Partially Oxidized Material	140

17.23	Borealis Mineral Resource Estimate – March 2008 Summary of Inferred Mineral Resource – Sulfide Material	140

17.24	West Model Measured, Indicated, and Inferred	141

17.25	South Model Measured, Indicated, and Inferred	142

17.26	East Model Measured, Indicated, and Inferred	143

17.27	North Model Measured, Indicated, and Inferred	144

17.28	Heap Name Correlation Chart	145

17.29	Production Volumes Versus Measured Heap Volumes	146

17.30	Reconciliation Waste Volumes Versus Measured Dump Volumes	146

17.31	Borealis Project March 2006 Mineral Resource Estimate Summary of Indicated Resource in Heaps	147

17.32	Borealis Project March 2006 Mineral Resource Estimate Summary of Inferred Resource in Heaps and Dumps	147

18.1	Other Minor Permits and Authorizations	158

23A.1	Mine Schedule	180

23B.1	Heap Leach Pad Design Criteria (By Knight Piésold)	192

23B.2	Recycle and Storm Water Pond Design Criteria (By Knight Piésold)	195

xiii

*List of Tables (Continued)*

*Table*	*Title*

23B.3	Heap Leach Pad Water Balance Input Parameters (By Knight Piésold)	196

23G1.1	Capital Cost Summary	216

23G2.1	Anticipated Contract Mining Equipment	219

23G2.2	Labor Requirements, Mining	220

23G2.3	Labor Requirements, Heap Leach and ADR Plant	221

23G2.4	Process Reagents, Heap Leach and ADR Plant	222

23G2.5	Process Consumables, Heap Leach and ADR Plant	222

23G2.6	Processing Summary, Heap Leach and ADR Plant	223

23G2.7	Annual G&A Cost Summary	223

*List of Drawings*

*Figure*	*Title*

23A.1	South Model, Borealis Project

23A.2	West Model, Borealis Project

23A.3	East Model Pits 1-4, Borealis Project

23A.4	North Model, Borealis Project

xiv

*List of Figures*

*Figure*	*Title*

1.1	Location Map of the Borealis Project	3

1.2	Local Geology of the Borealis District and Project Area	9

1.3	1989 Borealis District Aeromagnetic Survey Map	11

1.4	Selected Resistivity Anomaly Trends of the Borealis District	11

1.5	Adjacent Properties	18

2.1	Mineral Deposits and Prospects of the Borealis Property	29

4.1	Location Map of the Borealis Project	34

5.1	Photograph of a Portion of the Borealis District, circa 1991, View to the East with Freedom Flats Pit in the Foreground	39

7.1	Walker Lane Gold and Silver Deposits	51

7.2	Geologic Map of the Borealis Project Area	53

7.3	Volcanostratigraphic Section in the Borealis District	55

9.1	Typical Alteration Patterns of the Borealis District Gold Deposits	63

10.1	1989 Borealis District Aeromagnetic Survey Map	70

10.2	Selected Resistivity Anomaly Trends of a Portion of the Borealis District	71

15.1	Location of Borealis Property and Other Important Nearby Gold Mining Properties in the Walker Lane and Aurora-Borealis Cross Trend	91

16.1	Gold Leach Rate Profiles	98

17.1	Map Showing the North, South, and East Area Model Boundaries with Deposit Areas	109

17.2	Drill Hole Collar Locations in the South Area Model	113

17.3	Drill Hole Collar Locations in the North Area Model	114

17.4	Drill Hole Collar Locations in the East Area Model	115

*List of Figures (Continued)*

*Figure*	*Title*

17.5	Drill Hole Collar Locations in the West Area Model	116

17.6	Examples of Grade Zones on Cross Sections of the Graben and Freedom Flats Deposits – Section 0+1250 (Sections at 140 ^o azimuth – looking N. 50 ^o E.)	122

17.7	Examples of Grade Zones on Cross Sections of the Graben and Freedom Flats Deposits – Section 0+1500 (Sections at 140 ^o azimuth – looking N. 50 ^o E.)	122

17.8	Examples of Grade Zones on Cross Sections of the Graben and Freedom Flats Deposits – Section 0+1750 (Sections at 140 ^o azimuth – looking N. 50 ^o E)	123

17.9	Au Composites’ Histogram and Cumulative Frequency Plot Within the Graben – High Grade Deposit Grade Zones	124

17.10	Au Composites’ Histogram and Cumulative Frequency Plot Within the Freedom Flats Deposit Grade Zones	125

17.11	Examples of the Relationship Between Drill Hole Spacing / Density and Resource Classifications (Graben-Freedom Flats – 6500 Bench)	131

17.12	Examples of the Relationship Between Drill Hole Spacing / Density and Resource Classifications (Graben-Freedom Flats – 6400 Bench)	132

17.13	Examples of the Relationship Between Drill Hole Spacing / Density and Resource Classifications (Graben-Freedom Flats – 6300 Bench)	133

23B.1	Overall Flow Diagram	186

23B.2	Site Plan	187

23G2.1	Projected Income Statements	224

23G2.2	Projected Balance Sheets	225

23G2.3	Projected Statements of Cash Flow	226

23H.1	Projected Project Return	236

23H.2	Sensitivities	237

xvi

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xvii

1.0 Executive Summary

1.1 Introduction

This preliminary assessment has been prepared for filing pursuant to National Instrument 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators in connection with the potential to develop a gold and silver resource at the Borealis project. Based on the cost estimates detailed in this report, a financial model has been created to demonstrate the economic potential of the project.

The format and content of this report are intended to conform to Form 43-101F1, Technical Report.

This assessment includes a combination of measured, indicated and inferred oxide and mixed mineralized material that occur in and around the Borealis property that are amenable to heap leach processing. Some of the resources used in this assessment are based on speculation that may or may not be realized in practice.

The purpose of this assessment is to provide a conceptual capital and operating cost model for mine development for an operation that includes inferred material. The resource estimates used in this analysis were reported in Technical Report on the Mineral Resources of the Borealis Gold Project Located in Mineral County, Nevada , USA, April 28, 2008. The effective date of this preliminary assessment is 2 September, 2008.

Based on the results of this study, it is evident that the Borealis Gold Project, should the measured, indicated and inferred resources prove to be present and the projected tons and grade and recovery are realized, represents an attractive project that should be pursued with further exploration, metallurgical testing and potential development.

1.1.1 Terms of Reference

Borealis Mining Company (“BMC”) the wholly owned Nevada operating subsidiary of Gryphon Gold Corporation, is considering a resumption of mining and ore processing activities at the Borealis Mine Site. This preliminary assessment includes potential resources and was completed in an attempt to guide the exploration, expansion and development of the property in a manner that includes what is believed to be reasonably achievable resources. The principal operating permits have been granted for the proposed mining operation.

Gold bearing material will be mined from existing and new pit areas and reclaimed from piles of previously processed ore and dump material. The material will be excavated by conventional

open pit mining equipment. Ore will be crushed, agglomerated with lime, and stacked on a lined pad where it will be leached to recover contained gold and silver.

The Borealis Mine will produce 232,000 ounces of gold and 695,000 ounces of silver over four primary production years followed by one year of residual operations.

Reclamation of the surface disturbance will be completed contemporaneously with mining operations as described in the Plan of Operations approved by the US Forest Service and the Reclamation permit from the Nevada Division of Environmental Protection. A bond will be posted with the US Forest Service to insure performance under the approved reclamation plan.

1.1.2 Principal Contributions to this Technical Report

The principal author of this assessment is John R. Danio, P.E., Senior Associate, Telesto-Nevada, a Qualified Person for the purpose of Canadian NI 43-101, Standards of Disclosure for Mineral Projects. Mr. Danio was responsible for the development of capital and operating costs, mine plans and project revenue estimates. Contributing to this report is Dr. Roger C. Steininger, CPG, Consulting Geologist, a Qualified Person for the purpose of Canadian NI 43-101, Standards of Disclosure for Mineral Projects. Dr. Roger C. Steininger, CPG was the Chief Consulting Geologist in regard to geology, sampling, exploration, and mineral resource estimates. Mr. Steve Wolff prepared mineral resource estimates, reported in April 28, 2008. Additional input was provided by Knight Piésold and Co. (Knight Piésold) regarding environmental, permitting, and metallurgical issues. Mr. Kim Drossulis of Telesto-Nevada conducted mine planning based on the resource block models prepared by Mr. Wolff.

Mr. Danio visited the property for one day on 5 March, 2008. Dr. Steininger visited the Borealis property numerous times from startup in 2003, through the present. Mr. Jaye Pickarts, P.E., Principal Metallurgical Engineer, Knight Piésold and Co., visited the Borealis property on several occasions during 2004, 2005, and 2006 for the duration of one day in each instance; he observed the district geologic setting and existing site conditions, and Mr. Pickarts reviewed selective reverse circulation drill-sample intercepts of the mineralization for metallurgical purposes only. Mr. Drossulis worked at Borealis as a mine engineer for Tenneco Minerals from 1981 to 1986 and has visited the property for one day on 5 March, 2008.

1.1.3 Basis of Study

The scope of work for this assessment includes capital and operating cost models for the proposed mine resources including measured, indicated and inferred resources. These resources were reported in April 28, 2008 in Gryphon Gold Corporation Borealis Mining Company Canadian NI 43-101 Technical Report on the Mineral Resources of the Borealis Gold Project Located in Mineral County, Nevada, USA.

Results from the 2005-07 metallurgical test program (completed by McClelland Metallurgical Laboratories in Reno, Nevada) using material collected from development drilling and surface sampling have been utilized to support assumptions based on approximate production reports of 10 years of historical heap-leaching activities at the mine in the 1980s.

The scope of work in this study includes sufficient engineering and planning to provide for an estimate of capital and operating costs in the accuracy range of +/- 15 percent.

The major units used in this report are those commonly used in the United States: dry short tons of 2,000 pounds (tons), troy ounces per short ton (opt), miles, feet, etc. Where metric units are used, such is noted.

1.2 Project Description and Location

The Borealis Gold Project is located in western Nevada, approximately 16 road miles southwest of the town of Hawthorne in the Walker Lane Mineral Belt and 12 miles northeast of the California border; see Figure 1.1 below. Hawthorne is 133 highway miles southeast of Reno and 314 highway miles northwest of Las Vegas.

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