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Gryphon Signs Option to
Restructure its $5 Million Debt
On exercise $2.0 million converts to
shares at $0.50/share; balance extended to 2012
August 5, 2008 Vancouver, B.C. � Gryphon Gold Corporation (GGN:TSX /
GYPH:OTC.BB) has entered into an agreement providing Gryphon Gold with
an 18-month option to restructure the $5.0 million debt associated with the
purchase of its wholly owned subsidiary, Nevada Eagle Resources (August 21,
2007). The option to restructure this debt is expected to improve Gryphon
Gold's financing capability.
Under the terms of the option, which can be exercised any time during the
next 18 months,
half of the existing $5.0 million debt ($2.5 million) would be repaid by
converting $2 million into four million Gryphon Gold common shares
(effectively at $0.50/share) and making a $500,000 cash payment. The $2.5
million balance would convert into a secured convertible debenture,
convertible at $0.70/share for the first year (from the exercise date of
the option) and escalating by $0.10/share per year until maturity in March
30, 2012. The issuance of the shares and convertible note is subject to TSX
approval.
Mr. Jerry Baughman, the founder and former principal shareholder of Nevada
Eagle, has agreed to stand for election as a Director of Gryphon Gold at
our annual general meeting scheduled on September 4, 2008.
"We appreciate Jerry's vote of confidence in Gryphon Gold and are fortunate
to have Jerry, with over 20 years of precious metals exploration
experience, continuing to acquire highly prospective exploration stage
properties for Gryphon Gold in the western United States. Jerry is very
skilled at acquiring good properties on reasonable terms, and subsequently
leasing or joint venturing them to various major mining companies and a
host of juniors, at great advantage to Gryphon Gold", commented John
Key, Gryphon Gold's Chief Executive Officer..
ON BEHALF OF THE BOARD OF DIRECTORS OF GRYPHON GOLD CORPORATION
John L. Key, CEO
Full financial statements and securities filings are available on our
website: www.gryphongold.com and www.sec.gov
or www.sedar.com. For further information, contact John Key, CEO, by phone
at 604-261-2229 or email at jkey@gryophongold.com.
This press release contains "forward-looking information" which
may include, but is not limited to, statements with respect to the effect
of the option, the availability of future financing, estimates and
expectations. Such forward-looking statements reflect our current views
with respect to future events and are subject to certain risks,
uncertainties and assumptions, including conditions relating to the
exercise of the option, the risks and uncertainties outlined in our most
recent financial statements and reports and registration statement 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.
We do not undertake
to update forward-looking
statements.
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