UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

# FORM 10-QSB

| |  | QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| |  | ---------------------------------------------------------------------------------

| | For
the quarterly period ended: December 31, 2005
| | -------------------------------------------------

| |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| |  | ----------------------------------------------------------------------------------------

Commission file number: 333-127635

Gryphon Gold Corporation(Exact name of small business issuer as specified in its charter)

|NEVADA
(State or other jurisdiction of
incorporation or organiation) | 92-0185596
(I.R.S. Employer 
Identification No.)
|-------------------------------------------------------------------- | ------------------------------------------------

|390 UNION BLVD, SUITE 360 
       LAKEWOOD, CO
(Address of principal executive offices) | 80228
(Zip Code)
|--------------------------------------------------------------------------------------- | ----------------

Issuers Telephone Number:
   (303) 988-5777

Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes   
      No

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes   
      No

As
of December 31, 2005 there were 34,622,370 shares of common stock outstanding..

Transitional
Small Business Disclosure Format (check one)

Yes   
      No

---

GRYPHON GOLD CORPORATIONDecember 31, 2005

INDEX

| |  | Page No.(s)
| |  | -----------

|PART
I - | FINANCIAL INFORMATION | 1
|-------- | --------------------- | -

| | Item 1. | Unaudited Interim Financial Statements | 1
| | ------- | -------------------------------------- | -

| |  | Unaudited Consolidated Balance Sheet as of December 31, 2005 and March 31, 2005 | 1
| |  | ------------------------------------------------------------------------------- | -

| |  | Unaudited Consolidated Statement of Operations for the nine and three months
ended December 31, 2005 and 2004 | 2
| |  | ------------------------------------------------------------------------------------------------------------- | -

| |  | Unaudited Consolidated Statements of Stockholders Equity | 3
| |  | --------------------------------------------------------- | -

| |  | Unaudited Consolidated Statement of Cash Flows for the nine and three months
ended December 31, 2005 and 2004 | 4
| |  | ------------------------------------------------------------------------------------------------------------- | -

| |  | Notes to Unaudited Interim Consolidated Financial Statements | 5
| |  | ------------------------------------------------------------ | -

| | Item 2. | Plan of Operation | 11
| | ------- | ----------------- | --

| | Item 3. | Controls and Procedures | 16
| | ------- | ----------------------- | --

|PART
II - | OTHER INFORMATION | 16
|--------- | ----------------- | --

| | Item 1. | Legal Proceedings | 16
| | ------- | ----------------- | --

| | Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 16
| | ------- | ----------------------------------------------------------- | --

| | Item 3. | Defaults Upon Senior Securities | 18
| | ------- | ------------------------------- | --

| | Item 4. | Submission of Matters to a Vote of Security Holders | 18
| | ------- | --------------------------------------------------- | --

| | Item 5. | Other Information | 19
| | ------- | ----------------- | --

| | Item 6. | Exhibits | 19
| | ------- | -------- | --

| | SIGNATURES | 21
| | ---------- | --

i

---

PART I  FINANCIAL INFORMATION

Item 1.  
Unaudited Interim Financial Statements.

Gryphon Gold Corporation
(an exploration stage company)
CONSOLIDATED BALANCE SHEETS
(Stated in U.S. dollars)
(Unaudited)

|                                                 | As at
December 31,
2005
$ | As at
March 31,
2005
$
|------------------------------------------------ | ------------------------- | ----------------------
|                                                
|ASSETS                                           |                           |                       
|Current                                          |                          
|Cash                                             |                           | 6,215,053             
|Accounts receivable                              |                           | 56,659                
|Subscriptions receivable                         |                           |                      
|Prepaid expenses                                 |                           | 53,273                
|                                                
|Total current assets                             |                           | 6,324,985             
|                                                
|Reclamation deposit [note 7]                     |                           | 59,800                
|Equipment [note 3]                               |                           | 158,618               
|Mineral property costs [note 4]                  |                           | 1,875,191             
|                                                
|                                                 |                           | 8,418,594             
|                                                
|                                                
|LIABILITIES AND STOCKHOLDERS' EQUITY             |                          
|Current                                          |                          
|Accounts payable and accrued liabilities         |                           | 996,385               
|Mineral property acquisition obligation [note 4] |                           | 250,000               
|Current portion of capital lease [note 9]        |                           | 9,795                 
|                                                
|Total current liabilities                        |                           | 1,256,180             
|                                                
|                                                
|Capital lease [note 9]                           |                           | 21,939                
|                                                
|Commitments [note 8]                             |                          
|                                                
|Stockholders equity                             |                          
|Common stock                                     |                           | 34,622                
|Additional paid-in capital                       |                           | 13,936,032            
|Deficit accumulated during the exploration stage |                           | (6,830,179            
|                                                
|Total stockholders equity                       |                           | 7,140,475             
|                                                
|                                                 |                           | 8,418,594             
|                                                

See accompanying notes

 1 

---

Gryphon Gold Corporation
(an exploration stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. dollars)
(Unaudited)

|                                 | Three months ended | Nine months ended | Period from
April 24, 2003
(inception)
|-------------------------------- | ------------------ | ----------------- | --------------------------------------
|
|                                
|Exploration [note 5]             |                    | 926,361           |                                       
|Management salaries and          |                   
|consulting fees                  |                    | 478,582           |                                       
|Legal and audit                  |                    | 58,223            |                                       
|Travel and accommodation         |                    | 6,317             |                                       
|General and administrative       |                    | 120,549           |                                       
|Depreciation                     |                    | 5,421             |                                       
|Foreign exchange (gain) loss     |                    | (3,886            | )                                     
|Interest income                  |                    | (33,921           | )                                     
|                                
|Net loss for the period          |                    | (1,557,646        | )                                     
|                                
|Basic and diluted loss per share |                    | $         (0.05   | )                                     
|                                
|Basic and diluted weighted       |                   
|average number of common         |                   
|shares outstanding               |                    | 28,472,370        |                                       
|                                

See accompanying notes

 2 

---

Gryphon Gold Corporation
(an exploration stage company)
CONSOLIDATED STATEMENTS OF 
STOCKHOLDERS EQUITY(Stated in U.S. dollars)
(Unaudited)

|                                 | Common stock | Additional
paid in- | Deficit
accumulated
during the
exploration |       
|-------------------------------- | ------------ | ------------------- | ------------------------------------------ | ------
|
|                                
|Balance, April 24, 2003          |              |                    |                                            |      
|Shares issued:                   |             
|For private placements           |              | 14,376,000          |                                            | 14,376
|Compensation component of shares |             
|issued                           |              |                    |                                            |      
|Net loss for the period          |              |                    |                                            |      
|                                
|Balance, March 31, 2004          |              | 14,376,000          |                                            | 14,376
|Shares issued:                   |             
|For private placements           |              | 7,315,962           |                                            | 7,316 
|Share issue costs                |              |                    |                                            |      
|Compensation component of shares |             
|issued                           |              |                    |                                            |      
|Fair value of agents warrants   |             
|issued [note 6[b]]               |              |                    |                                            |      
|Fair value of options granted to |             
|a consultant [note 6[c]]         |              |                    |                                            |      
|Net loss for the year            |              |                    |                                            |      
|                                
|Balance, March 31, 2005          |              | 21,691,962          |                                            | 21,692
|Shares issued:                   |             
|For private placements           |              | 6,030,408           |                                            | 6,030 
|Share issue costs                |              |                    |                                            |      
|Initial Public Offering (IPO)    |              | 6,900,000           |                                            | 6,900 
|Share issue costs (IPO)          |              |                    |                                            |      
|Fair value of agents warrants   |             
|issued on a private placement    |             
|[note 6[b]]                      |              |                    |                                            |      
|Fair value of underwriters      |             
|compensation warrants on IPO     |             
|[note 6[b]]                      |              |                    |                                            |      
|Fair value of options granted to |             
|a consultant [note 6[c]]         |              |                    |                                            |      
|Net loss for the period          |              |                    |                                            |      
|                                
|Balance, December 31, 2005       |              | 34,622,370          |                                            | 34,622
|                                

See accompanying notes

 3 

---

Gryphon Gold Corporation
(an exploration stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS(Stated in U.S. dollars)
(Unaudited)

|                                                | Three months ended | Nine months ended | Period from
April 24, 2003
(inception)
|----------------------------------------------- | ------------------ | ----------------- | --------------------------------------
|
|                                               
|OPERATING ACTIVITIES                            |                    |                   |                                       
|Net loss for the period                         |                    | (1,557,646        | )                                     
|Items not involving cash:                       |                   
|Depreciation                                    |                    | 5,421             |                                       
|Shares issued for consulting fee                |                    |                  |                                       
|Compensation component of                       |                   
|shares issued                                   |                    |                  |                                       
|Fair value of options granted                   |                   
|to a consultant                                 |                    | 7,560             |                                       
|Changes in non-cash working                     |                   
|capital items:                                  |                   
|Amounts receivable                              |                    | (36,129           | )                                     
|Accounts payable and accrued                    |                   
|liabilities                                     |                    | 86,988            |                                       
|Prepaid expenses                                |                    | 707,300           |                                       
|                                               
|Cash used in operating activities               |                    | (786,506          | )                                     
|                                               
|INVESTING ACTIVITIES                            |                   
|Reclamation deposit                             |                    | (28,400           | )                                     
|Purchase of equipment                           |                    | (73,060           | )                                     
|Mineral property expenditures                   |                    | (250,000          | )                                     
|                                               
|Cash (used in) provided by investing activities |                    | (351,460          | )                                     
|                                               
|FINANCING ACTIVITIES                            |                   
|Cash received for shares                        |                    | 5,036,497         |                                       
|Share issue costs                               |                    | (2,106,840        | )                                     
|Subscription receivables                        |                   
|collected                                       |                    |                  |                                       
|                                               
|Cash provided by financing activities           |                    | 2,929,657         |                                       
|                                               
|Increase in cash during the                     |                   
|period                                          |                    | 1,791,691         |                                       
|Cash, beginning of period                       |                    | 4,423,362         |                                       
|                                               
|                                                |                    | 6,215,053         |                                       
|                                               

See accompanying notes

 4 

---

Gryphon Gold Corporation
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Stated in U.S. dollars)
(Unaudited)

# 1.    NATURE OF OPERATIONS
AND CONTINUANCE OF OPERATIONS

Gryphon Gold Corporation and its
subsidiary, Borealis Mining Company (collectively, the Company), were
incorporated in the State of Nevada in 2003. The Company is an exploration stage company
in the process of exploring its mineral properties, and has not yet determined whether
these properties contain reserves that are economically recoverable.

The recoverability of amounts shown
for mineral property interests in the Companys consolidated balance sheets are
dependent upon the existence of economically recoverable reserves, the ability of the
Company to arrange appropriate financing to complete the development of its properties,
the receipt of necessary permitting and upon achieving future profitable production or
receiving proceeds from the disposition of the properties. The timing of such events
occurring, if at all, is not yet determinable.

# 2.    BASIS OF PRESENTATION

These interim unaudited consolidated
financial statements have been prepared by the Company in accordance with U.S. generally
accepted accounting principles (GAAP) for interim financial statements,
applied on a consistent basis. These interim financial statements follow the same
significant accounting policies and methods of application as those disclosed in Note 2 to
the Companys audited consolidated financial statements as at and for the year ended
March 31, 2005 (the Annual Financial Statements). Accordingly, they do not
include all disclosures required for annual financial statements. These interim unaudited
consolidated financial statements and notes thereon should be read in conjunction with the
Annual Financial Statements.

The preparation of these interim
unaudited consolidated financial statements and the accompanying notes requires management
to make estimates and assumptions that affect the amounts reported. In the opinion of
management, these interim unaudited consolidated financial statements reflect all
adjustments (which include only normal, recurring adjustments) necessary to state fairly
the results for the periods presented. Actual results could vary from these estimates and
the operating results for the interim periods presented are not necessarily indicative of
the results expected for the full year.

 5 

---

Gryphon Gold Corporation
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Stated in U.S. dollars)
(Unaudited)

# 3.    EQUIPMENT

|                  | Cost
$ | Accumulated
depreciation
$ | Net book
value
$
|----------------- | ------ | -------------------------- | ----------------
|                 
|December 31, 2005 |        | 178,097                    |                 
|                 
|March 31, 2005    |        | 32,080                     |                 
|                 

# 4.    MINERAL PROPERTY

On January 28, 2005, the Company
purchased the rights to a full 100% interest in the Borealis property in Nevada, USA from
Golden Phoenix Minerals, Inc. (GPXM) for $1,400,000. A cash payment of
$400,000 was made on closing with four quarterly payments of $250,000 to be made over the
following 12 months. The Company pledged 15% of the shares of its subsidiary, Borealis
Mining Company, as security to GPXM against non-payment of the outstanding obligation. At
December 31, 2005, $250,000 remained payable to GPXM and 3.75% of Borealis Mining Company
shares were pledged. Subsequent  event: On January 24, 2006, the Company paid $250,000 to GPXM as the final instalment of the mineral  property  acquisition
obligation,  eliminating the outstanding  balance.  All previously  pledged shares of Borealis Mining Company have been returned to the
Company.

|                                     | 2005
$
|------------------------------------ | ------
|                                    
|Acquisition costs, March 31, 2005    |       
|Current expenditures                 |       
|                                    
|Acquisition costs, December 31, 2005 |       
|                                    

 6 

---

Gryphon Gold Corporation
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Stated in U.S. dollars)
(Unaudited)

# 5.    EXPLORATION

|                            | Three months ended | Nine months ended | Period from
April 24, 2003
(inception)
|--------------------------- | ------------------ | ----------------- | --------------------------------------
|
|                           
|NEVADA, USA                 |                    |                   |                                       
|Borealis property           |                   
|Exploration:                |                   
|Property maintenance        |                    | 242,593           |                                       
|Project management          |                    | --                |                                       
|Drilling                    |                    | 426,554           |                                       
|Feasibility and engineering |                    | 147,168           |                                       
|Geological                  |                    | 41,612            |                                       
|Metallurgy                  |                    | 68,434            |                                       
|                           
|Total exploration           |                    | 926,361           |                                       
|                           

# 6.    CAPITAL STOCK

|[a] |  | Authorized
share capital consists of 150,000,000 common shares with a par value           of $0.001
per share and 15,000,000 preferred shares with a par value of $0.001           per share.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
December 22, 2005 the Company completed an initial public offering of 6,900,000 units at
a price of Cdn$0.85 per unit. Each unit consisted of one share of common stock and one
Class A warrant to purchase one share of common stock exercisable until December 22, 2006
at Cdn$1.15. Total share issue costs associated with this offering were $2,241,940 which
includes the fair value of warrants issued to the underwriters as compensation, as
described in note 6[b] below.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|[b] |  | Warrants
|--- |  | --------

| | The
following table contains information with respect to all warrants:
| | ----------------------------------------------------------------------

|                                          | Number of 
warrants | Fair value of
warrants on
issuance
|----------------------------------------- | ------------------- | ----------------------------------
|                                         
|Warrants outstanding, March 31, 2005      |                     | 3,548,989                         
|Issued for:                               |                    
|Private placements                        |                     | 3,015,204                         
|Agent's compensation on private placement |                     | 130,000                           
|                                         
|Initial public offering (IPO) - Class A   |                     | 6,900,000                         
|Underwriters' compensation on IPO         |                     | 690,000                           
|Warrants outstanding, December 31, 2005   |                     | 14,284,193                        
|                                         

 7 

---

Gryphon Gold Corporation
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Stated in U.S. dollars)
(Unaudited)

6.   
          CAPITAL STOCK (contd.)

| | The
following table summarizes information about warrants outstanding and exercisable as at
December 31, 2005:
| | --------------------------------------------------------------------------------------------------------------

|Warrants Outstanding and Exercisable                                  
|----------------------------------------------------------------------
|                                                                      
|
|                                                                      
|6,423,185                                                             
|271,008                                                               
|6,900,000                                                             
|690,000                                                               
|                                                                      
|14,284,193                                                            
|                                                                      
|*  Based on December 31, 2005 exchange rate of Cdn$1.1630 equals US$1.

| | The
fair value of agents and underwriters warrants issued in the nine months
ended December 31, 2005 has been estimated using the Black-Scholes Option Pricing Model
based on the following assumptions respectively: a risk-free interest rate of 3.02% to
3.89% as of the date of transaction; expected life of 3 and 1 years depending on their
terms; an expected volatility of 72% and 65% (based on the average volatility of
companies in the industry at date of issuance); and no expectation for the payment of
dividends.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|[c] |  | Stock
options:
|--- |  | --------------

| | As
permitted by Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation (SFAS No. 123), the Company has
elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued
to Employees (APB No. 25), and complies with the disclosure provisions of
SFAS No. 123 for its employee and director stock-based compensation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
March 29, 2005, the Board of Directors adopted the 2004 Stock Incentive Plan (the Plan)
and on May 13, 2005 the Plan was approved by the shareholders. Under the Plan a total of
3,000,000 stock options may be granted over a 10 year period, with vesting provisions
determined by the Board. On the date of adoption 2,000,000 options were granted to
directors, officers and a consultant, which vested immediately and are exercisable for 5
years at a price of $0.75 per share. The consultant received 100,000 options which
resulted in compensation expense of $34,300 being recorded as consulting fees during the
year ended March 31, 2005.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2005, two newly appointed directors were granted 300,000 options which vest over
the following 18 months and are exercisable for 5 years at a price of $0.75 per share. In
September 2005, a newly appointed officer was granted 100,000 options which vest over the
following 24 months and are exercisable for 5 years at a price equal to the initial
public offering price of units or Cdn$0.85 per share.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 8 

---

Gryphon Gold Corporation
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Stated in U.S. dollars)
(Unaudited)

6.   
          CAPITAL STOCK (contd.)

| | In
November 2005, two employees were granted 95,000 options and a consultant was granted
20,000 options. These options vest over 18 to 24 months and are exercisable for 5 years
at a price equal to the initial public offering price of units or Cdn$0.85 per share. The
option grant to the consultant resulted in a compensation expense of $7,560 being
recorded in the quarter ended December 31, 2005.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table summarizes information about stock options outstanding and exercisable as
at December 31, 2005:
| | -------------------------------------------------------------------------------------------------------------------

|Options Outstanding and Exercisable Stock Options
|-------------------------------------------------
|                                                 
|
|                                                 
|
|                                                 
|2,300,000                                        
|                                                 
|215,000                                          

| | The
impact on the Company's net loss and net loss per share had the Company  recognized
 stock-based  compensation  using the fair      value method for options issued to
employees and directors would have been as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                            | Three months ended | Nine months ended | Period from
April 24, 2003
(inception)
|--------------------------- | ------------------ | ----------------- | --------------------------------------
|
|                           
|Net loss for the period     |                    | (1,557,646        | )                                     
|Additional compensation     |                   
|expense                     |                    | (7,560            | )                                     
|                           
|Pro forma net loss for the  |                    | (1,565,206        | )                                     
|period                      |                   
|                           
|Pro forma basic and diluted |                   
|loss per share              |                    | $       (0.05     | )                                     
|                           

| | The
pro forma compensation expense reflected above has been estimated using the Black-Scholes
option pricing model. The assumptions used in the pricing model include:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        | 2006 | 2005               
|----------------------- | ---- | -------------------
|                       
|Dividend yield          |      | 0%                 
|Expected volatility     |      | 70%, 68%, 65%      
|Risk free interest rate |      | 3.38%, 3.45%, 3.83%
|Expected lives          |      | 4 years            
|                       

Options pricing models require the
input of highly subjective assumptions, particularly as to the expected price volatility
of the stock. Changes in these assumptions can materially affect the fair value estimate
and therefore it is managements view that the existing models do not necessarily
provide a single reliable measure of the fair value of the Companys equity
instruments.

 9 

---

Gryphon Gold Corporation
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Stated in U.S. dollars)
(Unaudited)

# 7.    RECLAMATION DEPOSIT

The Company has purchased a
performance bond in the amount of $59,800 from an insurance company in support of its potential future
obligations under a Plan of Operation for exploration filed with the U.S. Forest Service.
At December 31, 2005, the Company recorded a reclamation liability of $10,000 related to
its drilling activities completed to date. The Company continues to hold the bond in
support of current and future obligations under the Plan of Operation for exploration
filed with the U.S. Forest Service.

# 8.    COMMITMENTS

|[a] |  | A
portion of the Borealis Property is subject to a mining lease. The Company is
          required to make monthly lease payments of $8,916, adjusted annually based on
          the Consumer Price Index, for the duration of the lease term. In addition,
          production of precious metals from the Borealis Property will be subject to the
          payment of a royalty under the terms of the mining lease. The mining lease
          expires in 2009, but may be renewed by the Company annually thereafter, so long
          as mining activity continues on the Borealis Property. The Company has the
          option to terminate the mining lease at any time prior to expiry in 2009.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|[b] |  | The
Company rents office space in Lakewood, CO and Vancouver, BC for 5 and 3           year
terms, respectively. The following are related commitments in the next 5           years:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|     | $
|---- | -
|    
|2006 |  
|2007 |  
|2008 |  
|2009 |  
|2010 |  
|    

# 9.    CAPITAL LEASE

The Company entered into a two year
lease, expiring in December 2007, to acquire a truck. The transaction is accounted for as
a capital lease, with the present value of the required lease payments recorded as a
liability and an asset at inception and thereafter lease payments reduce the liability and
result in interest expense and the asset is depreciated.

10.                   SUBSEQUENT
EVENT

In January 2006, the
Company granted a total of 190,000 stock options, 90,000 to                an employee
and 100,000 to a consulting firm. These options vest over 24 and 14                months
and are exercisable for 5 years at the closing market price of the common
               stock on the date of grant, of $1.15 and $1.25 respectively.

11.                   RECLASSIFICATION

Certain comparative amounts have been
reclassified to conform with current period disclosure.

 10 

---

# Item 2.    Plan of
Operation.

# Overview

Gryphon Gold Corporation was
incorporated in Nevada on April 24, 2003 and has corporate offices in Vancouver,
British Columbia, and Lakewood, Colorado. Our objective is to establish a producing gold
company through the development and extraction of gold deposits, beginning with the
Borealis Property. Currently our sole asset is a 100% interest in the Borealis Property,
located in Mineral County, Nevada. We have not determined if the mineralized material from
the Borealis Property can be economically exploited.

In July 2003 we initially acquired from Golden Phoenix Minerals, Inc. an option to earn a
70% joint venture interest in the Borealis Property by incurring qualified development
expenditures. On January 28, 2005 we acquired the remaining interest held by Golden
Phoenix in the Borealis Property for $1,400,000. Our subsidiary, Borealis Mining, paid to
Golden Phoenix $400,000 upon closing of the purchase on January 28, 2005, with four
additional quarterly payments of $250,000 due to Golden Phoenix. On January 24, 2006,
Borealis Mining completed all its financial requirements with respect to Golden Phoenix
with a final payment of $250,000.

A portion of the Borealis Property is subject to the mining lease. We are required to make
monthly lease payments of $8,916, adjusted annually based on change in the Consumer Price
Index. In addition, the production of precious metals from the Borealis Property will be
subject to the payment of the royalty under the terms of the mining lease. The terms of
the mining lease and royalty are described under Borealis Property. We have
also entered into office lease arrangements for offices in Vancouver, British Columbia,
Lakewood, Colorado and Hawthorne, Nevada.

In May 2005 we initiated a new drilling program, expected to continue to the early part of
2006. Approximately 140 holes (30,000 feet of RC drilling) are planned in the area of
existing mineralization in order to allow us to complete a feasibility study with the aim
of identifying gold reserves and, if economically feasible, building a mine.

We are preparing a feasibility study on the previously mined area of the Borealis Property
to further delineate the gold mineralization available for the operation of a mine, to
upgrade some or all of the mineralized material to proven and probable reserves, design
the open pit mine, heap leach pads and gold recovery plant and to estimate the capital and
operating costs of the proposed mining scenario. Metallurgical test work completed to date
indicates the material is amenable to conventional heap-leach recovery methods. Once we
have completed a feasibility study and, if warranted have made a decision to begin
development, we intend to develop our Borealis Property and place it into production,
assuming adequate additional capital is available.

In
December, 2005, the Company completed its initial public offering of 6.9 million units for
gross proceeds of Cdn $5.9 million. The units were sold at a price of Cdn$0.85 each and
consist of one common share and one warrant. Each warrant is exercisable for a period of
12 months at a price of Cdn $1.15. The common shares are listed on the Toronto Stock
Exchange under the symbol GGN. The proceeds of the offering will be used
principally for the completion of the Companys feasibility study for its Borealis
Property and its exploration program on the Borealis Property, as well as for working
capital.

In
2005 our exploration work focused on definition drilling contiguous to the areas of known
gold deposits (the Central Borealis); the results of which will be compiled and is
expected to be reported during this first quarter. During 2006 the Company plans to
continue definition drilling (budgeted at C$1.2 million) and to launch a broader scale
district exploration program (budgeted at C$1.7 million) targeting areas with known gold
mineralization on the balance of the 23 square mile property.

Our plan for the 2006 fiscal year (ending March 31, 2006) and beyond is to work
towards completing a feasibility study and mine plan for our Borealis Property and, if
warranted and we are able to raise sufficient additional capital, building an open pit
heap-leach mine. The following activities are planned for fiscal 2006:

| |  |  | Continuation
of the permitting process, with the aim of obtaining substantial permits for mine
development expected in early 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

 11 

---

| |  |  | Completion
 of a drilling program and a feasibility study designed to classify current
resources into ore reserves and to develop an economic mine plan.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Initiate
 an exploration program to assess several identified zones on the Borealis property
which have gold mineralization potential similar to the previously mined area.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Managements
Discussion and Analysis

This
discussion and analysis should be read in conjunction with the accompanying Consolidated
Financial Statements and related notes. The discussion and analysis of the financial
condition and results of operations are based upon the consolidated financial statements,
which have been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the company to make
estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of any contingent liabilities at the financial statement date and reported
amounts of revenue and expenses during the reporting period. On an on-going basis the
company reviews its estimates and assumptions. The estimates were based on historical
experience and other assumptions that the company believes to be reasonable under the
circumstances. Actual results are likely to differ from those estimates under different
assumptions or conditions, but the company does not believe such differences will
materially affect our financial position or results of operations. Critical accounting
policies, the policies the company believes are most important to the presentation of its
financial statements and require the most difficult, subjective and complex judgments, are
outlined below in Critical Accounting Policies, and have not changed
significantly.

We use words like expects, believes, intends,
anticipates, plans, targets, projects or
estimates in this quarterly report. When used, these words and other, similar
words and phrases or statements that an event, action or result will,
may, could, or should occur, be taken or be achieved
identify forward-looking statements. Such forward-looking statements reflect
our current views with respect to future events and are subject to certain risks,
uncertainties and assumptions, including, the risks and uncertainties outlined in Exhibit
99.1 titled Risk Factors and Uncertainties. 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. Our
management has included projections and estimates in this quarterly report, which are
based primarily on managements experience in the industry, assessments of our
results of operations, discussions and negotiations with third parties and a review of
information filed by our competitors with the Securities and Exchange Commission or
otherwise publicly available. We caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. We disclaim any
obligation subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.

We qualify all the forward-looking statements contained in this quarterly report by the
foregoing cautionary statements.

# Critical Accounting
Policies and Estimates

The
preparation of our consolidated financial statements is in accordance with accounting
principles generally accepted in the United States. We do not reconcile our consolidated
financial statements to Canadian generally accepted accounting principles. The following
are critical accounting policies and estimates which we believe are important to
understanding our financial results.

| | Use
of estimates
| | ----------------

The
preparation of financial statements requires us to make estimates and assumptions which
affect the reported amounts of assets and liabilities at the date of the financial
statements and the revenues and expenses for the period reported. By their nature, these
estimates are subject to measurement uncertainty and the effect on the financial

 12 

---

statements of changes in such
estimates in future periods could be significant. Actual results will likely differ from
these estimates.

| | Exploration
of mineral property interests
| | -----------------------------------------

We
expense exploration costs as they are incurred. When we determine that a mining deposit
can be economically and legally extracted or produced based on established proven and
probable reserves, development costs incurred after such determination will be
capitalized. The establishment of proven and probable reserves is based on results of
final feasibility studies which indicate whether a property is economically feasible. Upon
commencement of commercial production, we will transfer capitalized costs to the
appropriate asset category and amortize them over their estimated useful lives and/or ounces produced, as appropriate. We
capitalize the cost of acquiring mineral property interests (including claims
establishment and maintenance) until we have determined the viability of the property. We
expense capitalized acquisition costs if we determine that the property has no future
economic value. We will also write down capitalized amounts if estimated future cash
flows, including potential sales proceeds, related to the mineral property are estimated
to be less than the carrying value of the property.

| | Stock-based
compensation
| | ------------------------

As
permitted by the Statement of Financial Accounting Standards we have elected to follow
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations for our employee stock-based compensation. Based on these
standards, no compensation expense is recognized at the time of any option grant if the
exercise price of the employee stock option is fixed and equals or exceeds the fair value
of the underlying common stock on the date of the grant and the number of shares to be
issued pursuant to the exercise of such option are known and fixed at the date of grant.

| | Asset
retirement obligations
| | ----------------------------

We
record the present value of an asset retirement obligation as a liability in the period in
which we incur a legal obligation associated with the retirement of tangible long-lived
assets that results from the acquisition, construction, development or normal use of the
assets with a corresponding increase in the carrying amount of the related long-lived
asset. This amount is depreciated over the estimated useful life of the related assets.
The liability is subsequently accreted through charges to expense over its expected life.
Currently, we have no asset retirement obligations.

| | Tax
valuation allowance
| | -----------------------

We
have recorded a valuation allowance that fully reserves for our deferred tax assets
because at this time we cannot establish that we will be able to utilize the tax loss
carryforwards in the future. If in the future we determine that we will be able to use all
or a portion of our deferred tax assets in the future, based on our projections of future
taxable income, we will reduce the valuation allowance, thereby increasing income in that
period.

| | Foreign
currency translation
| | ----------------------------

The
United States dollar is our functional currency. Transactions involving foreign currencies
for items included in operations are translated into U.S. dollars using average exchange
rates; monetary assets and liabilities are translated at the exchange rate prevailing at
the balance sheet date and all other balance sheet items are translated at the historical
rates applicable to the transactions that comprise those amounts. Translation gains and
losses are included in our determination of net income.

| | Recent
Accounting Pronouncements
| | --------------------------------

The
United States Securities and Exchange Commission recently announced that it would provide
for a phased-in implementation process for FASB Statement No. 123(R), Share-Based Payment
(SFAS 123(R)). Registrants must adopt SFAS 123(R)s fair value method of
accounting for share-based payments to employees no later than the beginning of the first
interim or annual period beginning after December 15, 2005. We plan to adopt SFAS 123(R)
effective January 1, 2006.

The
Financial Accounting Standards Board ratified the consensus of the Emerging Issues Task
Force that stripping costs incurred during the production phase of a mine are variable
production costs that should be included in the costs of the inventory produced during the
period that the stripping costs are incurred. This consensus is effective for the first
reporting period in fiscal years beginning after December 15, 2005, with early adoption

 13 

---

permitted. To date the Company has
not incurred any stripping costs. We plan to adopt the consensus effective April 1, 2006.

# Results of Operations

We
are in an exploration stage and currently have no producing mineral properties and thus we
had no revenues during all reporting periods.

Three months ended
December 31, 2005 compared to three months ended December 31, 2004

For
the three month period ended December 31, 2005 we had a net loss of $1,557,646 or $0.05
per share compared to a net loss of $490,505 or $0.03 per share in the same period in the
prior year. Our operating expenses, excluding costs directly related to completion of our
initial public offering (IPO), totaled $1,591,567 during the quarter ended December 31,
2005 compared to $498,812 in the same period in the prior year. Our largest costs are
exploration expenses incurred on our Borealis property and in the quarter ended December
31, 2005 they reached $926,361 or 58% of our total expenses, compared to $104,288 or 21%
of total expenses in the quarter ended December 31, 2004. The increase in spending was
related to the ongoing definition drilling program and feasibility study, initiated in May
2005, and also the costs of continuing our permitting activities. During the quarter a
total of 39 reverse circulation drill holes were completed, no drilling was carried out
during the prior year quarter. Exploration expenses are anticipated to continue as we work
to complete the feasibility study during the second calendar quarter of 2006. Management
salaries and consulting fees in the quarter ended December 31, 2005 were $478,582 compared
to $272,854 incurred in the quarter ended December 31, 2004 as staffing levels have
increased. Salaries and consulting fees are expected to continue to increase in future
periods as we expect to hire additional personnel if we commence mine development on the
Borealis property. Legal and audit fees expensed during the quarter were $58,223, which
excludes costs directly attributable to the IPO, compared to $60,294 during the quarter
ended December 31, 2004. Travel and accommodation during the quarter ended December 31,
2005 was only $6,317, as most travel during the current quarter was directly related to
the IPO and compared to $29,214 expended on travel in the prior year quarter. General and
administrative expenses of $120,549 compared to $32,775 in the prior year quarter. Travel
and general and administrative expenses will continue to increase in future periods with
the expected continuing increase in activity to support the development of our Borealis
property and with the additional obligations as a public company in the United States and
in Canada. We had interest income of $33,921 in the quarter ended December 31, 2005,
compared to $8,307 in the prior year as cash balances increased significantly.

Nine months ended
December 31, 2005 compared to nine months ended December 31, 2004

For
the nine month period ended December 31, 2005 we had a net loss of $3,188,834 or $0.12 per
share compared to a loss of $1,654,985 or $0.11 per share in the nine months ended
December 31, 2004 on fewer shares outstanding. The current year period loss does not
reflect the costs directly related to the completion of the IPO, as those costs are
treated as share issue costs and are offset directly against the proceeds of the offering.
Exploration expenses during the nine month period ending December 31, 2005 were $1,764,827
or 53% of our total expenses during the period compared to $744,373 or 45% of total
expenses in the nine month period ended December 31, 2004. The increase in spending was
related to the definition drilling program and feasibility study initiated in May 2005.
The definition drilling program is ongoing and the feasibility study is anticipated to be
completed in the second calendar quarter of 2006. During the nine months ended December
31, 2005 a total of 94 reverse circulation holes were drilled on the Borealis property,
compared to 32 holes during same period in 2004. Management salaries and consulting fees
in the nine month period ended December 31, 2005 were $919,525 compared to $617,772
expended in the nine months ended December 31, 2004 as staffing increased in the 2005
period. Legal and audit fees expensed during the current nine month period were $247,694
compared to $104,786 during the nine month period ended December 31, 2004, the increase in
costs reflecting activity related to exploring financing alternatives and changing our
reporting to US generally accepted accounting principles (GAAP) from Canadian GAAP. Our
travel and accommodation expenses were $102,474 during the first nine months of 2005 and
compared to $82,723

 14 

---

spent in the nine month period ending
December 31, 2004, the increase was result of higher staffing and travel related to
financing activity prior to the IPO and work on the Borealis property. General and
administrative expenses during the nine month period ended December 31, 2005 were $251,462
compared to $107,691 in the prior year nine month period, the increase due to higher
spending on investor relations, rent, office support, insurance and telephone. Interest
income earned in the nine month period ending December 31, 2005 was $113,050 compared to
$8,902 in the same period in 2004 due to higher cash balances and the use of interest
bearing bank accounts in 2005.

# Liquidity and Capital
Resources

Our
principal source of liquidity is cash which is raised by way of sale of commons shares
from treasury. On December 22, 2005 we completed an underwritten initial public offering
(IPO) in Canada by selling 6,900,000 units, consisting of one share of common stock and
one Class A warrant, at Cdn$0.85 per unit. The shares were listed on the TSX for trading.
The net proceeds of this offering were $2,794,557 after deducting costs of $2,241,940.
These costs, which include underwriters discounts and commissions, were higher than
anticipated due to the complexity of the dual securities registration process (USA and
Canada) and, as a percentage of funds raised, were high due to the fixed nature of many of the costs.

During
the nine month period ended December 31, 2005 total cash of $6,843,494 was raised from the
sale of stock in private placements and the IPO, net of costs, compared to $1,443,500
raised during the same period in the prior year. During the nine month period in 2005
total of $849,865 was invested in the mineral property, principally in payments to Golden
Phoenix, and $113,513 was invested in equipment, including an electronic spectrometer,
computers and furniture. During the nine month period ending December 31, 2004, $233,550
was invested in the mineral property and $12,958 was invested in equipment.

At
December 31, 2005 we had working capital of $5,068,805, and we had current assets
consisting of $6,215,053 in cash, $56,659 in accounts receivable and $53,273 in prepaid
expenses. We had $1,256,180 in current liabilities at December 31, 2005, consisting of
$996,385 in accounts payable and accrued liabilities, $250,000 in property purchase
obligations to Golden Phoenix (repaid on January 24, 2006) and $9,795 in current portion
of a capital lease. We believe we have sufficient working capital to fund completion of
our drilling program, permitting and feasibility study, costs related to lease and claim
maintenance fees, our payment obligations to Golden Phoenix and general and administrative
expenses for approximately 18 months. In order to bring the Borealis property into
production we will need to obtain additional capital, either by sale of common stock or by
issuing debt.

Summary of any product
research and development that the company will perform for the term of the plan.

The Company does not anticipate
performing any product research and development under its plan of operation.

Expected purchase or sale
of plant and significant equipment.

The Company is reviewing alternatives
for purchase of mine equipment if the development of a mine on the Borealis property is
warranted by a feasibility study and additional financing is obtained.

Significant changes in
number of employees.

The Company expects the number of
employees to gradually increase from current level (8).

# Off-Balance Sheet
Arrangements

The
Company does not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to investors.

 15 

---

# Item 3.    Controls and
Procedures

The
Company maintains disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the specified time
periods. As of the end of the period covered by this report, the Companys principal
executive officer and principal financial officer evaluated the effectiveness of our
disclosure controls and procedures. Based on the evaluation, which disclosed no
significant deficiencies or material weaknesses, the Companys principal executive
officer and principal financial officer concluded that the Companys disclosure
controls and procedures are effective.

There
were no changes in the companys internal control over financial reporting that
occurred during the companys most recent fiscal quarter and the period covered by
this quarterly report that have materially affected, or are reasonably likely to
materially affect, the companys internal control over financial reporting.

# PART II  OTHER
INFORMATION

# Item 1.    Legal
Proceedings.

Except
as provided below, neither we nor any of our property, including the Borealis Property,
are currently subject to any material legal proceedings or other regulatory proceedings,
and to our knowledge no such proceedings are contemplated.

On September 16, 2005, our subsidiary, Borealis Mining Company, was named as a
co-defendant in an ongoing civil action pending in the United States District Court for
the District of Nevada, entitled United States v. Walker River Irrigation District(Court Doc. No. In Equity C-125, Subfile C-125-B). The action seeks to determine
the existence and extent of water rights held by the federal government in the Walker
River drainage area for use on federally reserved lands such as Indian reservations,
National Forests, military reservations, and the like. The suit does not dispute nor seek
to invalidate any existing water rights (including ours); rather, it seeks to determine
the extent and priority of the federal governments water rights. On May 27,
2003, the Court stayed all proceedings to allow the United States, the State of Nevada,
the State of California, the Walker River Paiute Tribe, the Walker River Irrigation
District, Mono County, California, Lyon County, Nevada, Mineral County, Nevada and the
Walker Lake Working Group to attempt to mediate a settlement. Borealis Mining Company was
named as one of several hundred co-defendants in this action because it owns water rights
within a portion of the Walker River drainage area in Nevada, which were granted under a
permit on September 16, 2005. We, like most private water right owners, do not intend
to participate in the merits of the lawsuit. We do not believe that this civil action,
which will determine the extent and priority of federally reserved water rights in the
area, will have any effect on our planned business operations as we currently have permits
to access water from two sites for our Borealis Property, one of which is not subject to
this action and either of which, individually, would provide a sufficient water supply for
our planned operations.

# Item 2.    Unregistered
Sales of Equity Securities and Use of Proceeds.

Since
our inception we have offered and sold the following securities in unregistered
transactions pursuant to exemptions under the Securities Act of 1933, as amended.

On
or about May 15, 2003, we issued 3,000,000 shares of common stock to our
founding shareholders at $0.10 per share. We offered and sold shares outside the
United States to non-U.S. persons in off-shore transactions pursuant to the
exemption from registration available under Regulation S of the Securities Act and
in the United States in private transactions not involving a public offering pursuant to
exemptions available under Rule 506 of Regulation D and Section 4(2) of
the Securities Act.

On
or about June 15, 2003, we issued 1,885,000 shares of common stock at $0.15 per
share to our directors. We offered and sold shares outside the United States to non-U.S. persons
in off-shore transactions pursuant to the exemption from registration available under
Regulation S of the Securities Act and in the United States in private transactions
not involving a public offering pursuant to exemptions available under Rule 506 of
Regulation D and Section 4(2) of the Securities Act.

 16 

---

On
or about August 15, 2003, we issued 1,902,500 shares of common stock at $0.20 per
share and 537,500 shares of common stock at $0.225 per share payable by
installment promissory notes. We offered and sold shares outside the United States to
non-U.S. persons in off-shore transactions pursuant to the exemption from
registration available under Regulation S of the Securities Act and in the United
States in private transactions not involving a public offering pursuant to exemptions
available under Rule 506 of Regulation D and Section 4(2) of the
Securities Act.

On
or about September 16, 2003, we issued 270,000 shares of common stock at $0.15 per
share to a director, 1,400,000 shares of out common stock at $0.20 per share,
and an additional 100,000 shares of our common stock at $0.225 per share
payable by installment promissory notes. We offered and sold shares outside the United
States to non-U.S. persons in off-shore transactions pursuant to the exemption from
registration available under Regulation S of the Securities Act and in the United
States in private transactions not involving a public offering pursuant to exemptions
available under Rule 506 of Regulation D and Section 4(2) of the
Securities Act.

On
or about December 17, 2003, we issued 95,000 shares of common stock at $0.15 per share to
a director, 3,663,500 shares of common stock at $.20 per share and 122,500 shares
of common stock at $0.225 per share payable by installment promissory notes. We
offered and sold shares outside the United States to non-U.S. persons in off-shore
transactions pursuant to the exemption from registration available under Regulation S
of the Securities Act and in the United States in private transactions not involving a
public offering pursuant to exemptions available under Rule 506 of Regulation D
and Section 4(2) of the Securities Act.

On
or about March 8, 2004, we issued 1,250,000 shares of common stock at $0.15 per
share to our directors and 150,000 shares of common stock at $0.20 per share. We offered
and sold shares outside the United States to non-U.S. persons in off-shore
transactions pursuant to the exemption from registration available under Regulation S
of the Securities Act and in the United States in private transactions not involving a
public offering pursuant to exemptions available under Rule 506 of Regulation D
and Section 4(2) of the Securities Act.

On
September 7, 2004, we reserved for issuance and later sold 500,000 shares of
common stock to our chief financial officer at $0.35 per share under the terms of
his employment agreement. The shares were issued in a private transaction not involving a
public offering pursuant to exemptions available under Section 4(2) of the
Securities Act.

On
September 28, 2004, we sold 778,500 shares of common stock at $0.65 per
share and subsequently issued 389,250 share purchase warrants to each purchaser
exercisable to acquire one share of common stock at $0.90 per share until the
earlier of two years from the date of issuance or twelve months after our shares of
common stock are listed for trading on a recognized exchange. We offered and sold units
outside the United States to non-U.S. persons in off-shore transactions pursuant to
the exemption from registration available under Regulation S of the Securities Act.
We offered and sold units solely to accredited investors in the United States in private
transactions not involving a public offering pursuant to exemptions available under Rule 506
of Regulation D and Section 4(2) of the Securities Act.

On
January 26, 2005, we sold 1,410,077 units at $0.65 per unit. Each unit
consisted of one share of common stock and one-half of one share purchase warrant, each
whole warrant exercisable to acquire one share of common stock at $0.90 per share
until the earlier of two years from the date of issuance or twelve months after our
shares of common stock are listed for trading on a recognized exchange. We offered and
sold units outside the United States to non-U.S. persons in off-shore transactions
pursuant to the exemption from registration available under Regulation S of the
Securities Act. We offered and sold units solely to accredited investors in the United
States in private transactions not involving a public offering pursuant to exemptions
available under Rule 506 of Regulation D and Section 4(2) of the
Securities Act.

On
March 28, 2005, we sold 4,627,385 units at $0.65 per unit. Each unit
consisted of one share of common stock and one-half of one share purchase warrant, each
whole warrant exercisable to acquire one share of common stock at $0.90 per share
until the earlier of two years from the date of issuance or twelve months after our
shares of common stock are listed for trading on a recognized exchange. We offered and
sold units outside the United States to non-U.S. persons in off-shore transactions
pursuant to the exemption from registration available under Regulation S of the
Securities Act. We offered and sold units to accredited investors in the United States in
private transactions not involving a public offering pursuant to exemptions available
under Rule 506 of Regulation D and Section 4(2) of the Securities Act.

 17 

---

On
or about March 29, 2005, we granted options exercisable to acquire 2,000,000 shares
of common stock at $0.75 per share to officers, directors, employees and a
consultant in compensatory transactions not involving a public offering pursuant to
exemptions available under Rule 701 of the Securities Act.

On
April 1, 2005, we sold 1,300,000 units at $0.65 per unit. Each unit
consisted of one share of common stock and one-half of one share purchase warrant, each
whole warrant exercisable to acquire one share of common stock at $0.90 per share
until the earlier of two years from the date of issuance or twelve months after our
shares of common stock are listed for trading on a recognized exchange. We offered and
sold units outside the United States to non-U.S. persons in off-shore transactions
pursuant to the exemption from registration available under Regulation S of the
Securities Act. We offered and sold units solely to accredited investors in the United
States in private transactions not involving a public offering pursuant to exemptions
available under Rule 506 of Regulation D and Section 4(2) of the
Securities Act.

On
April 25, 2005, we sold 4,221,154 units at $0.65 per unit. Each unit
consisted of one share of common stock and one-half of one share purchase warrant, each
whole warrant exercisable to acquire one share of common stock at $0.90 per share
until the earlier of two years from the date of issuance or twelve months after our
shares of common stock are listed for trading on a recognized exchange. We offered and
sold units outside the United States to non-U.S. persons in off-shore transactions
pursuant to the exemption from registration available under Regulation S of the
Securities Act. We offered and sold units solely to accredited investors in the United
States in private transactions not involving a public offering pursuant to exemptions
available under Rule 506 of Regulation D and Section 4(2) of the
Securities Act.

On
June 22, 2005, we sold 509,254 units at $0.65 per unit. Each unit
consisted of one share of common stock and one-half of one share purchase warrant, each
whole warrant exercisable to acquire one share of common stock at $0.90 per share
until the earlier of two years from the date of issuance or twelve months after our
shares of common stock are listed for trading on a recognized exchange. We offered and
sold units outside the United States to non-U.S. persons in off-shore transactions
pursuant to the exemption from registration available under Regulation S of the
Securities Act. We offered and sold units solely to accredited investors in the United
States in private transactions not involving a public offering pursuant to exemptions
available under Rule 506 of Regulation D and Section 4(2) of the
Securities Act.

On
August 3, 2005, we granted options exercisable to acquire 300,000 shares of
common stock at $0.75 per share to two new independent directors in compensatory
transactions not involving a public offering pursuant to exemptions available under Rule 701
of the Securities Act.

On
September 16, 2005, we granted options exercisable to acquire 120,000 shares of
common stock at Cdn$0.85 per share to one officer and one consultant in compensatory transactions not
involving a public offering pursuant to exemptions available under Rule 701 of the
Securities Act.

On
November 9, 2005, we granted options exercisable to acquire total 95,000 shares of
common stock at Cdn$0.85 per share to two employees in
compensatory transactions not involving a public offering pursuant to exemptions
available under Rule 701 of the Securities Act.

On
January 5, 2006, we granted options exercisable to acquire 90,000 shares of common
stock at Cdn$1.15 per share to an officer in compensatory transactions not involving
a public offering pursuant to exemptions available under Section 4(2) of the
Securities Act.

On
January 10, 2006, we granted options exercisable to acquire 100,000 shares of common
stock at Cdn$1.25 per share to a consulting firm in compensatory transaction not
involving a public offering. Such option grant was made outside the United States to
non-U.S. persons in off-shore transactions pursuant to the exemption from
registration available under Regulation S of the Securities Act.

# Item 3.    Defaults Upon
Senior Securities.

None.

# Item 4.    Submission of Matters
to a Vote of Security Holders.

None.

 18 

---

# Item 5.    Other
Information.

None.

# Item 6.    Exhibits

| | ExhibitNumber |  | Description
| | ------------- |  | -----------

| | 3.1(1) |  | Articles
of Incorporation of Gryphon Gold Corporation, filed April 24, 2003
| | ------ |  | ---------------------------------------------------------------------------

| | 3.2(1) |  | Certificate
of Amendment to Articles of Incorporation of Gryphon Gold Corporation, filed August 9,
2005
| | ------ |  | -------------------------------------------------------------------------------------------------------

| | 3.3(1) |  | Bylaws
of Gryphon Gold Corporation
| | ------ |  | ----------------------------------

| | 3.4(1) |  | Articles
of Incorporation of Borealis Mining Company, filed June 5, 2003
| | ------ |  | ------------------------------------------------------------------------

| | 3.5(1) |  | Bylaws
of Borealis Mining Company
| | ------ |  | ---------------------------------

| | 4.1(4) |  | Specimen
Common Stock certificate
| | ------ |  | ---------------------------------

| | 4.2(3) |  | Form
of Warrant Indenture
| | ------ |  | -------------------------

| | 4.3(4) |  | Form
of Underwriters' Compensation Options
| | ------ |  | ------------------------------------------

| | 10.1(1) |  | Investor
Rights Agreement by and among Gryphon Gold Corporation and the Stockholders Party Hereto,
dated           as of May 1, 2003, as amended
| | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2(1) |  | Assignment
of Borealis Mining Lease, dated January 10, 2005, between Golden Phoenix Mineral Company
and           Borealis Mining Company
| | ------- |  | -----------------------------------------------------------------------------------------------------------------------------------------

| | 10.3(1) |  | Agreement
and Consent to Assignment of Borealis Mining Lease, entered into as of January 26, 2005,
          between Richard J. Cavell, Hardrock Mining Company, John W. Whitney, Golden
Phoenix Minerals, Inc.,           Borealis Mining Company and Gryphon Gold Corporation
| | ------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.4(1) |  | Escrow
Agreement, dated January 10, 2005, between Borealis Mining Company, Gryphon Gold Company
and           Lawyers Title Agency of Arizona (Regarding Purchase Agreement dated January
10, 2005)
| | ------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5(1) |  | Purchase
Agreement dated January 10, 2005, as amended, Seller: Golden Phoenix Minerals, Inc.,
Buyer:           Borealis Mining Company and Guarantor: Gryphon Gold Corporation
| | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.6(1) |  | Agreement
between Golden Phoenix Minerals, Inc. and Borealis Mining Company (Borealis Property,
Mineral           County, Nevada), dated July 21, 2003
| | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.7(1) |  | Agency
Agreement/ Investment Advisory Retainer, between Gryphon Gold Corporation and Desjardins
          Securities Inc., signed March 9, 2005
| | ------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 10.8(1) |  | Service
Agreement between Gryphon Gold Corporation and The Kottmeier Resolution Group Ltd., dated
          May 17, 2005
| | ------- |  | ------------------------------------------------------------------------------------------------------------------------

| | 10.9(1) |  | Office
Building Lease dated June 22, 2005, related to Lakewood, Colorado office
| | ------- |  | -------------------------------------------------------------------------------

| | 10.10(1 |  | Executive
Compensation Agreement, dated October 1, 2003, between Gryphon Gold Corporation and Allen
          Gordon dba Evergreen Mineral Ventures LLC
| | ------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.11(1) |  | Assignment
Assumption Agreement between Gryphon Gold Corporation and Allen Gordon
| | -------- |  | ---------------------------------------------------------------------------------

| | 10.12(1) |  | Executive
Compensation Agreement, dated October 1, 2003, between Gryphon Gold Corporation and
Albert              Matter
| | -------- |  | ------------------------------------------------------------------------------------------------------------------------

 19 

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| | ExhibitNumber |  | Description
| | ------------- |  | -----------

| | 10.13(1) |  | Executive
Compensation Agreement, dated February 1, 2004, between Gryphon Gold Corporation and Tony
             Ker
| | -------- |  | --------------------------------------------------------------------------------------------------------------------

| | 10.14(1) |  | Executive
Compensation Agreement, dated November 1, 2004, between Gryphon Gold Corporation and
Thomas              Sitar
| | -------- |  | ------------------------------------------------------------------------------------------------------------------------

| | 10.15(1) |  | Executive
Compensation Agreement, dated June 1, 2005 between Gryphon Gold Corporation and Donald
Ranta
| | -------- |  | ------------------------------------------------------------------------------------------------------

| | 10.16(1) |  | Gryphon
Gold Corporation 2004 Stock Incentive Plan
| | -------- |  | --------------------------------------------------

| | 10.17(4) |  | Form
of Escrow Agreement
| | -------- |  | ------------------------

| | 10.18(2) |  | Form
of Lock Up Agreement-- Shareholders
| | -------- |  | ----------------------------------------

| | 10.19(2) |  | Form
of Lock Up Agreement for Executive Officers and Directors
| | -------- |  | --------------------------------------------------------------

| | 10.20(2) |  | Warrant
Agreement dated August 10, 2005, between Gryphon Gold Corporation and Computershare Trust
             Company, Inc. (Golden, Colorado)
| | -------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 14.1(2) |  | Code
of Business Conduct and Ethics
| | ------- |  | -----------------------------------

| | 16.1(2) |  | Letter
on Change of Certifying Accountant
| | ------- |  | -----------------------------------------

| | 31.1 |  | Certification
Required Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
| | ---- |  | --------------------------------------------------------------------------------

| | 31.2 |  | Certification
Required Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
| | ---- |  | --------------------------------------------------------------------------------

| | 32.1 |  | Certification
Required Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
| | ---- |  | --------------------------------------------------------------------------------

| | 32.2 |  | Certification
Required Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
| | ---- |  | --------------------------------------------------------------------------------

| | 99.1 |  | Risk
Factors and Uncertainties
| | ---- |  | ------------------------------

_________________

| | (1) |  | Previously
filed on Form SB-2 on August 17, 2005.
| | --- |  | -------------------------------------------------

| | (2) |  | Previously
filed on Form SB-2 on October 6, 2005.
| | --- |  | -------------------------------------------------

| | (3) |  | Previously
filed on Form SB-2 on October 27, 2005.
| | --- |  | --------------------------------------------------

| | (4) |  | Previously
filed on Form SB-2 on November 9, 2005
| | --- |  | -------------------------------------------------

 20 

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# SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GRYPHON GOLD CORPORATION

By:  /s/ Allen S. Gordon
       Allen S. Gordon
       President and Director
       (On behalf of the registrant and as
        principal executive officer)

Date: February 10, 2006

 21 

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