Gryphon Minerals moves step closer to becoming first Australian gold producer in Burkina Faso

Gryphon Minerals (ASX:GRY) has received a boost with independent engineering studies by Lycopodium highlighting Gryphon could be producing over 180,000 ounces of gold at Banfora Gold Project at a cash cost of US$430 per ounce by 2014.

The completion of a positive independent preliminary open pit engineering assessment is based on a 2.5 million tonne per annum open pit mining operation using a conventional carbon in leach processing plant.

The company is moving closer to its goal of becoming a significant West African gold producer and the first Australian gold mining company in Burkina Faso.

Gryphon is not resting on its laurels with detailed feasibility studies expected to be completed by mid 2012, as well as continuing to maintain an aggressive A$30 million exploration program , with further resource growth anticipated during the 2011/12 financial year.

Gryphon will now begin detailed feasibility studies on a +3.5 million tonne per annum (Mtpa) operation with potential +200,000 ounces per annum (oz pa) gold production.

Steve Parsons, Gryphon Managing director, said "we are extremely pleased with the excellent results received from this independent engineering study, it has ticked some of the big boxes and provides a clear path for Gryphon to move immediately into detailed feasibility studies."

"Among the highlights from the studies are the outstanding metallurgical recoveries of 93% using a coarse grind, 65% conversion of resources to in-pit mineral inventory, cash costs well below industry peers and a head grade of more than two grams per tonne of gold."

Based on the 2.5mtpa operation, forecast production is for +180,000oz per annum, at +2.6 grams per tonne 9g/t) gold and

There have been outstanding metallurgical recoveries of 93% gold using a coarse grind (96% for oxide mineralisation and 91% for primary/sulphide mineralisation)

There is excellent infrastructure including access to surplus water, existing telecommunications facilities, roads, site locations for processing plant, dam and tailings and anticipated use of grid power.

The company anticipates permitting and construction in late 2012 with first gold poured in early 2014.

In addition the company has strong Government and local community support and had A$50.4 million cash in bank at the end of the June quarter.

With results including 8 metres at 38.75g/t gold from 68 metres from the aggressive $30 million exploration program underway at Banfora, the company's current valuation could still be on the low side within 12-18 months - given Gryphon's outstanding exploration track record in West Africa.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19133/gryphon-minerals-moves-step-closer-to-becoming-first-australian-gold-producer-in-burkina-faso--19133.html