1262751--6/26/2009--GRYPHON_GOLD

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Risks Related to Our Operations Our operations will require future financing and our lease for the Borealis property is affected by our ability to perform development work, an activity that requires capital. Recent market events and conditions, including disruptions in the U.S. and international credit markets and other financial systems and the deterioration of the U.S. and global economic conditions, could, among other things, impede access to capital or increase the cost of capital, which would have an adverse effect on our ability to fund our working capital and other capital requirements. Risks related to the Borealis Property. Risks related to Nevada Eagle properties Recent market events and current economic conditions may negatively impact the expected cash flow to Nevada Eagle for the lease of its exploration properties. Leverage as a result of our outstanding convertible notes may harm our financial condition and results of operations. We have no history of producing metals from our mineral property and there can be no assurance that we will successfully establish mining operations or profitably produce precious metals. Historical production on the Borealis Property may not be indicative of the potential for future development. Our exploration activities on the Borealis Property may not be commercially successful, which could lead us to abandon our plans to develop the property and our investments in exploration. Actual capital costs, operating costs, production and economic returns may differ significantly from those we have anticipated and there are no assurances that our development activities will result in profitable mining operations. A shortage of equipment and supplies could adversely affect our ability to operate our business. The figures for our mineralization are estimates based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated. Changes in the market price of gold, silver and other metals, which in the past has fluctuated widely, will affect the profitability of our operations and financial condition. Mining is inherently dangerous and subject to conditions or events beyond our control, which could have a material adverse effect on our business. We are subject to significant governmental regulations. Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations. Land reclamation requirements for our Borealis Property may be burdensome. We may experience difficulty attracting and retaining qualified management to meet the needs of our anticipated growth, and the failure to manage our growth effectively could have a material adverse effect on our business and financial condition. Increased competition could adversely affect our ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future. We compete with larger, better capitalized competitors in the mining industry. Title to the Borealis Property and our properties held through Nevada Eagle may be subject to other claims, which could affect our property rights and claims. There are differences in U.S. and Canadian practices for reporting reserves and resources. We will be required to locate mineral reserves for our long-term success. We do not insure against all risks which we may be subject to in our planned operations. Our directors and officers may have conflicts of interest as a result of their relationships with other companies. New legislation, including the Sarbanes-Oxley Act of 2002, may make it difficult for us to retain or attract officers and directors. While we believe we have adequate internal control over financial reporting, we will be required to provide an auditor s attestation on the effectiveness of our internal controls under Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such attestation could result in a loss of investor confidence in our financial reports and have an adverse effect on the price of our shares of common stock. Risks Related To Our Securities Broker-dealers may be discouraged from effecting transactions in our common shares because they are considered a penny stock and are subject to the penny stock rules. In the event that your investment in our shares is for the purpose of deriving dividend income or in expectation of an increase in market price of our shares from the declaration and payment of dividends, your investment will be compromised because we do not intend to pay dividends.

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1262751--6/26/2009--GRYPHON_GOLD_CORP