Gryphon Gold Reports Annual Financial Results for March 31, 2011

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/30/11 -- Gryphon Gold Corporation (TSX: GGN)(OTCBB: GYPH) (the 'Company') today announced financial results for the year ending March 31, 2011. The Company had a consolidated loss from continuing operations of $3,383,599 or $0.04 per share and income of $635,708 or $0.01 per share from discontinued operations for the year ending March 31, 2011, compared to a consolidated loss of $3,273,757 from continuing operations or $0.05 per share and income of $957,536 or $0.02 per share for the year ending March 31, 2010 on fewer shares outstanding.

Business highlights for the year ended March 31, 2011:

--  On April 23, 2010, Gryphon Gold sold its wholly owned subsidiary, Nevada
    Eagle Resources LLC to Fronteer for $4,750,000. Fronteer paid $2,250,000
    in cash and $2,500,000 by assuming Gryphon Gold's obligations under a
    convertible note, which was retired. In addition, Gryphon Gold retained
    the Copper Basin property located in Idaho. The Company recognized a
    gain of $664.952 in connection with the sale;

--  On January 21, 2011, the Company closed the private placement announced
    on January 5, 2011 and issued 6,500,000 units at a purchase price of
    Cdn$0.20 per unit for gross proceeds of $1,308,558. Each unit consists
    of one share of common stock and one half of one common stock purchase
    warrant. Each whole common stock purchase warrant is exercisable for a
    period of two years from the date of closing of the private placement to
    purchase one additional share of common stock at an exercise price of
    US$0.30;

--  On February 4, 2011, we announced that we had filed a registration
    statement on Form S-1 with the Securities and Exchange Commission in the
    United States and submitted for filing a preliminary short form
    prospectus with securities regulatory authorities in the Canadian
    Provinces of British Columbia, Alberta, Saskatchewan and Ontario, in
    relation to a proposed $10,000,000 public offering of our common stock
    in both the United States and Canada. Subsequent to year end, on May 18,
    2011, this public offering was completed for proceeds of $10.9 million.

--  On May 26, 2011, we announced that, effective May 20, 2011, we exercised
    the option to fix the Net Smelter Return (NSR) royalty on its Borealis
    Property at 5%. In August 2008, Gryphon and its wholly-owned subsidiary,
    BMC, entered into an option agreement with the lessors of the Borealis
    Property to amend the Borealis Mining Lease to fix the gold price based
    sliding scale royalty at a 5% Net Smelter Royalty. Prior to the exercise
    of the option, the NSR payable to the lessors on the Borealis Property
    was calculated as the price of gold divided by one hundred expressed as
    a percentage (i.e. at a gold price of $1,500/ounce the NSR royalty rate
    would be 15.0%). Under the terms of the option agreement, as amended,
    Gryphon exercised the option by paying the lessors aggregate
    consideration of $7,000,000 (less the $250,000 previously paid by
    Gryphon to the lessors upon execution of the Option Agreement) as
    follows:

    --  $150,000 in cash,

    --  7,726,500 shares of common stock at a deemed value of $0.40 per
        share ($3,090,500);

    --  5% promissory notes in the aggregate principal amount of $1,600,000,
        due May 20, 2013, with installment payments due upon commencement of
        production on the Borealis Property; and

    --  5% convertible notes in the aggregate principal amount of
        $1,909,500, due May 20, 2014, convertible into shares of Gryphon
        common stock at $0.70 per share through May 20, 2012, $0.80 per
        share through May 20, 2013 and $0.90 per share through May 20, 2014.

Exploration expenses from continuing operations during the year ended March 31, 2011 were $949,022 or 28% of our net expense from continuing operations compared to $1,405,165 or 43% of our total net expenses from continuing operations in the prior year. During the year ended March 31, 2011, Gryphon Gold completed a total of 49 reverse circulation drill holes for 7,215 feet and 3 core holes for 110 feet on the Borealis Property. Much of the current year's exploration expense was from property lease payments, claim maintenance fees and two small drill programs.

Management salaries and consulting fees from continuing operations for the year ended March 31, 2011 were $1,195,968 compared to $682,814 incurred in the prior year. The increase is due to our CEO returning to full time and the hiring of additional geological and engineering staff along with the hiring of an investor relation consultant. Total non-cash compensation expense recognized in the year totaled $184,410 compared to non-cash compensation expense of $166,088 recognized in the prior year. General and administrative from continuing operations expenses totaled $699,613, compared to $521,774 in the prior year. The increase is due to the addition of the Carson City, Nevada office, and increased investor relations activity. Legal and audit fees from continuing operations for the period decreased to $260,470 from $429,314 for the year ended March 31, 2011. The decrease resulted from a decrease in corporate activities. Travel and accommodation expense for the year ended March 31, 2011 was $142,515, compared to $119,777 for the prior year.

ABOUT GRYPHON GOLD:

Gryphon Gold is a Nevada-focused gold exploration company. The Company's principal property is its Borealis gold project located in the Walker Lane gold belt of western Nevada.

This press release contains 'forward-looking statements' and 'forward-looking information' within the meaning of United States and Canadian securities laws, which may include, but are not limited to statements relating to the Company's plans to advance its Borealis Oxide Heap Leach Project; the schedule for site construction work, heap leach pad construction, pad loading, and revenue from gold sales at the Borealis Oxide Heap Leach Project; assumptions related to the commercial viability of the Borealis Oxide Heap Leach Project; assumptions related to gold grade and recoverability, estimates of tonnage and grade, anticipated release of further updates on the progress at the Borealis project and other statements relating to plans, estimates, objectives, and timing. Such forward-looking statements and forward-looking information reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risk that financing for the development of the Borealis Oxide Heap Leach Project may not be available on terms satisfactory to the Company if at all, risks associated with the start up of mining operations, and the risks and uncertainties outlined under the section headings 'Forward-Looking Statements' and 'Risks Factors and Uncertainties' in the Company's annual report on Form 10-K, as filed with the SEC on June 28, 2010, under the section heading 'Risk Factors' in the Company's most recent quarterly report on Form 10-Q, as filed with the SEC on February 11 2011, under the section heading 'Risk Factors' I the Company's Form S-1/A, as filed with the SEC on May 12, 2011 and in the Company's other reports, documents, and registration statements 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. The Company does not undertake to update forward-looking statements or forward-looking information, except as may be required by law. Full financial statements and securities filings are available on the Company's website: www.gryphongold.com and www.sec.gov or www.sedar.com.

The technical report information in this press release was approved by Mr. Steve Craig, VP of Exploration of Gryphon Gold Corporation, and is a Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators. Mr. Craig has supervised the preparation of the data contained in the press release.

Cautionary Note to U.S. Investors concerning estimates of Reserves and Resources: The 2011 Pre-Feasibility Study referred to in this press release uses the terms 'Proven and Probable Reserves' and 'Mineral Reserves'. We advise U.S. investors that while these terms are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 ('NI 43-101') - Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining, Metallurgy and Petroleum ('CIM') - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended, such definitions differ from the definitions in U.S. Securities and Exchange Commission ('SEC') Industry Guide 7. Under SEC Industry Guide 7 standards, a 'final' or 'bankable' feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. U.S. investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into SEC Industry Guide 7 reserves. The 2011 Pre-Feasibility Study also uses the terms 'Measured Resources', 'Indicated Resources', 'Measured & Indicated Resources' and 'Inferred Resources.' We advise U.S. investors that while these terms are defined in and required by Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. 'Inferred Resources' have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or pre-feasibility study, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant 'reserves' as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into Guide 7 reserves.

Contacts:

Gryphon Gold Corporation

John L. Key

CEO

775 315-4828
jkey@gryphongold.com


Gryphon Gold Corporation

Lisanna M. Lewis

Vice President, Treasurer

604 261-2229
llewis@gryphongold.com
www.gryphongold.com