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EXHIBIT 99.1 

RISK FACTORS AND UNCERTAINTIES
Readers should carefully consider the risks anduncertainties described below before deciding whether to invest in shares of ourcommon stock. 

Our failure to successfully address the risks anduncertainties described below would have a material adverse effect on ourbusiness, financial condition and/or results of operations, and the tradingprice of our common stock may decline and investors may lose all or part oftheir investment. We cannot assure you that we will successfully address theserisks or other unknown risks that may affect our business. 

Estimates of mineralized material are forward-lookingstatements inherently subject to error. Although resource estimates require ahigh degree of assurance in the underlying data when the estimates are made,unforeseen events and uncontrollable factors can have significant adverse orpositive impacts on the estimates. Actual results will inherently differ fromestimates. The unforeseen events and uncontrollable factors include: geologicuncertainties including inherent sample variability, metal price fluctuations,variations in mining and processing parameters, and adverse changes inenvironmental or mining laws and regulations. The timing and effects ofvariances from estimated values cannot be accurately predicted. 
***Our operations will require future financing.
We are an early stage company andcurrently do not have sufficient capital to fully fund the Plan of Operation atthe Borealis Property. Currently, we have sufficient cash on hand to fundpartial completion of our current drilling program, permitting and general andadministrative expenses for approximately 6 - 8 months. However, we will requiresubstantial additional financing for future development activities, if any, orif we encounter unexpected costs or delays. 

Failure to obtain sufficientfinancing may result in the delay or indefinite postponement of exploration,and, development or production on any or all of the Borealis Property and anyproperties we may acquire in the future or even a loss of our property interest.This includes the Borealis Property, as our lease over claims covering theprincipal deposits will expire in 2009 unless we are engaged in active miningoperations at that time. We cannot be certain that additional capital or othertypes of financing will be available if needed or that, if available, the termsof such financing will be favorable or acceptable to us. Future financings maycause dilution to our shareholders. 
***We currently depend on a single property — the Borealis Property.
Our only mineral property is the Borealis Property. Eventhough the Borealis Property encompasses several areas with known goldmineralization, unless we acquire additional properties or projects or discoveradditional deposits at the Borealis Property, we will be solely dependent uponthe success of the Borealis Property as a source of future revenue and profits,if any. We cannot provide any assurance that we will establish any reserves orsuccessfully commence mining operations on the Borealis Property or that we willever obtain an interest in any other property with mineral potential in order todiversify our business 
***We have no history of producing metals from our mineral property and therecan be no assurance that we will successfully establish mining operations orprofitably produce precious metals.***
We have no history of producing metals from the BorealisProperty. While our plan is to move the Borealis Property into the developmentstage, production there will be subject to completing construction of the mine,processing plants, roads, and other related works and infrastructure. As aresult, we are subject to all of the risks associated with establishing newmining operations and business enterprises including: 

●     the timing  and cost, which can be considerable, of the construction of mining and  processing facilities;  

●     the availability and  costs of skilled labor and mining equipment;  

●     the availability and  cost of appropriate smelting and/or refining arrangements;  

●     compliance with  environmental and other governmental approval and permit requirements; 
●      the availability of funds tofinance construction and development activities; 

●    potential opposition fromnon-governmental organizations, environmental groups, local groups or localinhabitants which may delay or prevent development activities; and 

●    potential increases in constructionand operating costs due to changes in the cost of fuel, power, materials andsupplies. 

The costs, timing and complexities ofmine construction and development may be increased by the remote location of theBorealis Property. It is common in new mining operations to experienceunexpected problems and delays during construction, development and minestart-up. In addition, delays in the commencement of mineral production oftenoccur. Accordingly, we cannot assure you that our activities will result inprofitable mining operations or that we will successfully establish miningoperations or profitably produce metals at any of our properties. 
***Historical production on the Borealis Property may not be indicative of thepotential for future development.
The Borealis Mine actively producedgold in the 1980’s, but we currently have no commercial production at theBorealis Property and have never recorded any revenues. You should not rely onthe fact that there were historical mining operations at the Borealis Propertyas an indication that we will ever place the property into commercialproduction. We expect to continue to incur losses unless and until such time, ifever, as our property enters into commercial production and generates sufficientrevenues to fund our continuing operations. The development of new miningoperations at the Borealis Property will require the commitment of substantialresources for operating expenses and capital expenditures, which may increase insubsequent years as needed consultants, personnel and equipment associated withadvancing exploration, development and commercial production of our propertiesare added. The amounts and timing of expenditures will depend on the progress ofongoing exploration and development, the results of consultants’ analysis andrecommendations, the rate at which operating losses are incurred, the executionof any joint venture agreements with strategic partners, our acquisition ofadditional properties, and other factors, many of which are beyond our control.We may not be able to place the Borealis Property into production or generateany revenues or achieve profitability. 
***Our exploration activities on the Borealis Property may notbe commercially successful, which could lead us to abandon our plans to developthe property and our investments in exploration.
Our long-term success depends on ourability to identify additional mineral deposits on the Borealis Property andother properties we may acquire, if any, that we can then develop intocommercially viable mining operations. Mineral exploration is highly speculativein nature, involves many risks and is frequently nonproductive. These risksinclude unusual or unexpected geologic formations, and the inability to obtainsuitable or adequate machinery, equipment or labor. The success of goldexploration is determined in part by the following factors: 

●      the identification ofpotential gold mineralization based on surficial analysis;

●      availability of government-grantedexploration permits; 

●      the quality of our management and ourgeological and technical expertise; and 

●      the capital available forexploration.
Substantial expenditures are requiredto establish proven and probable reserves through drilling and analysis, todevelop metallurgical processes to extract metal, and to develop the mining andprocessing facilities and infrastructure at any site chosen for mining. Whethera mineral deposit will be commercially viable depends on a number of factors,which include, without limitation, the particular attributes of the deposit,such as size, grade and proximity to infrastructure; metal prices, whichfluctuate widely; and government regulations, including, without limitation,regulations relating to prices, taxes, royalties, land tenure, land use,importing and exporting of minerals and environmental protection. We may investsignificant capital and resources in exploration activities and abandon suchinvestments if we are unable to identify commercially exploitable mineralreserves. The decision to abandon a project may have an adverse effect on themarket value of our securities and the ability to raise future financing. Wecannot assure you that we will discover or acquire any mineralized material insufficient quantities on any of our properties to justify commercial operations.

***Actual capital costs, operating costs, production andeconomic returns may differ significantly from those we have anticipated andthere are no assurances that our development activities will result inprofitable mining operations.***
We have estimated operating andcapital costs for the Borealis Property based on information available to us andbelieve that these estimates are accurate. However, recently, costs for labor,regulatory compliance, energy, mine and plant equipment and materials needed formine development and construction have increased significantly industry-wide. Inlight of these factors, actual costs related to our proposed mine developmentand construction may exceed our estimates. 

We do not have an operating historyupon which we can base estimates of future operating costs related to theBorealis Property, and we intend to rely upon the economic feasibility of theproject and estimates contained therein. Studies derive estimates of cashoperating costs based upon, among other things: 

●      anticipated tonnage, gradesand metallurgical characteristics of the ore to be mined and processed; 

●      anticipated recovery rates of goldand other metals from the ore; 

●      cash operating costs of comparablefacilities and equipment; and 

●      anticipated climatic conditions. 
Capital and operating costs,production and economic returns, and other estimates contained in feasibilitystudies may differ significantly from actual costs, and there can be noassurance that our actual capital and operating costs will not be higher thancurrently anticipated or disclosed. 

In addition, our calculations of cash costs and cashcost per ounce may differ from similarly titled measures of other companies andare not intended to be an indicator of projected operating profit. 
***The figures for our reserves and resources are estimatesbased on interpretation and assumptions and may yield less mineral productionunder actual conditions than is currently estimated.***
Unless otherwise indicated,mineralization figures presented in this prospectus and in our filings withsecurities regulatory authorities, press releases and other public statementsthat may be made from time to time are based upon estimates made by independentgeologists and our internal geologists. When making determinations about whetherto advance any of our projects to development, we must rely upon such estimatedcalculations as to the mineral reserves and grades of mineralization on ourproperties. Until ore is actually mined and processed, mineral reserves andgrades of mineralization must be considered as estimates only. 

These estimates are imprecise and depend upongeological interpretation and statistical inferences drawn from drilling andsampling analysis, which may prove to be unreliable. We cannot assure you that:

●      these estimates will beaccurate; 

●      reserve, resource or othermineralization estimates will be accurate; or 

●      this mineralization can be mined orprocessed profitably. 
Any material changes in mineralreserve estimates and grades of mineralization will affect the economicviability of placing a property into production and a property’s return oncapital. 

Because we have not started mineconstruction at our Borealis Property and have not commenced actual production,mineralization estimates, including reserve and resource estimates, for theBorealis Property may require adjustments or downward revisions based uponactual production experience. In addition, the grade of ore ultimately mined, ifany, may differ from that indicated by our feasibility studies and drillresults. There can be no assurance that minerals recovered in small scale testswill be duplicated in large scale tests under on-site conditions or inproduction scale. 

The resource estimates contained inthis report have been determined and valued based on assumed future prices,cut-off grades and operating costs that may prove to be inaccurate. Extendeddeclines in market prices for gold and silver may render portions of ourmineralization, reserve and resource estimates uneconomic and result in reducedreported mineralization or adversely affect the commercial viability of ourBorealis Property. Any material reductions in estimates of mineralization, or ofour ability to extract this mineralization, could have a material adverse effecton our results of operations or financial condition. 
***Changes in the market price of gold, silver and other metals,which in the past has fluctuated widely, will affect the profitability of ouroperations and financial condition.***
Our profitability and long-termviability depend, in large part, upon the market price of gold and other metalsand minerals produced from our mineral properties. The market price of gold andother metals is volatile and is impacted by numerous factors beyond our control,including: 

●      expectations with respect tothe rate of inflation; 
●      the relative strength of theU.S. dollar and certain other currencies; 

●      interest rates; 

●      global or regional political oreconomic conditions; 
●      supply and demand for jewelryand industrial products containing metals; and 
●      sales by central banks andother holders, speculators and producers of gold and other metals in response toany of the above factors. 
We cannot predict the effect of thesefactors on metal prices. Gold and silver prices have fluctuated during the lastseveral years. The price of gold was $513 per ounce at December 31, 2005, andduring 2006 has had a high of $725 and a low of $525. The price of gold was $632per ounce on December 31, 2006. The price of silver also improved from $8.83 perounce at December 31, 2005 to close at December 31, 2006 at $12.90 per ounce,with a yearly high of $14.94, with a low of $8.83, during 2006. Historically,gold prices ranged from $536.50 to $411.10 per ounce in 2005 and from $454.20 to$375.00 per ounce in 2004; and silver prices have ranged from $9.22 to $6.39 perounce in 2005 and from $8.29 to $5.49 per ounce in 2004. 

A decrease in the market price ofgold and other metals could affect the commercial viability of our BorealisProperty and our anticipated development and production assumptions. Lower goldprices could also adversely affect our ability to finance future development atthe Borealis Property, all of which would have a material adverse effect on ourfinancial condition and results of operations. There can be no assurance thatthe market price of gold and other metals will remain at current levels or thatsuch prices will improve. 
***Mining is inherently dangerous and subject to conditions orevents beyond our control, which could have a material adverse effect on ourbusiness. 

Mining involves various types ofrisks and hazards, including: 
●      environmental hazards;  

●      power outages; 
●      metallurgical and other  processing problems; 

●      unusual or unexpected geological  formations; 

●      structural cave-ins or slides; 
●      flooding, fire, explosions,  cave-ins, landslides and rock-bursts; 

●      inability to obtain suitable or  adequate machinery, equipment, or labor; 

●      metals losses; and 

●      periodic interruptions due to  inclement or hazardous weather conditions. 

These risks could result in damageto, or destruction of, mineral properties, production facilities or otherproperties, personal injury, environmental damage, delays in mining, increasedproduction costs, monetary losses and possible legal liability. We may not beable to obtain insurance to cover these risks at economically feasible premiums.Insurance against certain environmental risks, including potential liability forpollution or other hazards as a result of the disposal of waste productsoccurring from production, is not generally available to us or to othercompanies within the mining industry. We may suffer a material adverse effect onour business if we incur losses related to any significant events that are notcovered by our insurance policies. 
***We are subject to significant governmental regulations.***
Our primary properties, operationsand exploration and development activities are in Nevada and are subject toextensive federal, state, and local laws and regulations governing variousmatters, including: 

●      environmental protection; 
●      management and use of toxicsubstances and explosives; 
●      management of naturalresources; 
●      exploration, development ofmines, production and post-closure reclamation; 
●      exports controls; 
●      price controls; 
●      regulations concerningbusiness dealings with native groups; 
●      labor standards andoccupational health and safety, including mine safety; and 
●      historic and culturalpreservation. 
Failure to comply with applicablelaws and regulations may result in civil or criminal fines or penalties orenforcement actions, including orders issued by regulatory or judicialauthorities enjoining or curtailing operations or requiring corrective measures,installation of additional equipment or remedial actions, any of which couldresult in us incurring significant expenditures. We may also be required tocompensate private parties suffering loss or damage by reason of a breach ofsuch laws, regulations or permitting requirements. It is also possible thatfuture laws and regulations, or a more stringent enforcement of current laws andregulations by governmental authorities, could cause additional expense, capitalexpenditures, restrictions on or suspensions of our operations and delays in thedevelopment of our properties. 
***Our activities are subject to environmental laws andregulations that may increase our costs of doing business and restrict ouroperations.***
All of our exploration and potentialdevelopment and production activities are in the United States and are subjectto regulation by governmental agencies under various environmental laws. Theselaws address emissions into the air, discharges into water, management of waste,management of hazardous substances, protection of natural resources, antiquitiesand endangered species and reclamation of lands disturbed by mining operations.Environmental legislation in many countries is evolving and the trend has beentowards stricter standards and enforcement, increased fines and penalties fornon-compliance, more stringent environmental assessments of proposed projectsand increasing responsibility for companies and their officers, directors andemployees. Compliance with environmental laws and regulations and future changesin these laws and regulations may require significant capital outlays and maycause material changes or delays in our operations and future activities. It ispossible that future changes in these laws or regulations could have asignificant adverse impact on our Borealis Property or some portion of ourbusiness, causing us to re-evaluate those activities at that time. 
***Land reclamation requirements for our Borealis Property maybe burdensome.***
Although variable depending onlocation and the governing authority, land reclamation requirements aregenerally imposed on mineral exploration companies (as well as companies withmining operations) in order to minimize long term effects of land disturbance.

Reclamation may include requirementsto: 

●      control dispersion ofpotentially deleterious effluents; and 

●      reasonably re-establishpre-disturbance land forms and vegetation. 
In order to carry out reclamationobligations imposed on us in connection with our potential developmentactivities, we must allocate financial resources that might otherwise be spenton further exploration and development programs. We have set up a provision forour reclamation obligations at the Borealis Property, butthis provision may not be adequate. If we are required to carry outunanticipated reclamation work, our financial position could be adverselyaffected. 
***We may experience difficulty attracting and retainingqualified management to meet the needs of our anticipated growth, and thefailure to manage our growth effectively could have a material adverse effect onour business and financial condition.***
We are dependent on the services ofkey executives including Tony Ker, CEO, Albert Matter, Chairman, MichaelLonginotti, CFO, Steve Craig, VP Exploration, and other highly skilled andexperienced executives and personnel focused on bringing our Borealis Propertyinto production and managing our interests and on-going exploration programs onour other properties. Our management is also responsible for the identificationof new opportunities for growth and funding. Due to our relatively small size,the loss of these persons or our inability to attract and retain additionalhighly skilled employees required for our development activities may have amaterial adverse effect on our business or future operations. The failure tohire qualified people for these positions could adversely affect plannedoperations of the Borealis Property. We do not maintain key-man life insuranceon any of our key management employees.***Increased competition could adversely affect our ability toattract necessary capital funding or acquire suitable producing properties orprospects for mineral exploration in the future.***
The mining industry is intenselycompetitive. Significant competition exists for the acquisition of propertiesproducing, or capable of producing, gold or other metals. We may be at acompetitive disadvantage in acquiring additional mining properties because wemust compete with other individuals and companies, many of which have greaterfinancial resources, operational experience and technical capabilities than us.We may also encounter increasing competition from other mining companies in ourefforts to hire experienced mining professionals. Competition for explorationresources at all levels is currently very intense, particularly affecting theavailability of manpower, drill rigs, mining equipment and production equipment.Increased competition could adversely affect our ability to attract necessarycapital funding or acquire suitable producing properties or prospects formineral exploration in the future. 
***We compete with larger, better capitalized competitors in themining industry.***
The mining industry is competitive inall of its phases, including financing, technical resources, personnel andproperty acquisition. It requires significant capital, technical resources,personnel and operational experience to effectively compete in the miningindustry. Because of the high costs associated with exploration, the expertiserequired to analyze a project’s potential and the capital required to develop amine, larger companies with significant resources may have a competitiveadvantage over us. We face strong competition from other mining companies, somewith greater financial resources, operational experience and technicalcapabilities than us. As a result of this competition, we may be unable tomaintain or acquire financing, personnel, technical resources or attractivemining properties on terms we consider acceptable or at all. 
***Title to the Borealis Property may be subject to otherclaims, which could affect our property rights and claims.
Although we believe we have exercisedcommercially reasonable due diligence with respect to determining title toproperties we own or control and the claims that are subject to the Borealismining lease, there is no guarantee that title to such properties will not bechallenged or impugned. The Borealis Property may be subject to prior unrecordedagreements or transfers or native land claims and title may be affected byundetected defects. There may be valid challenges to the title of the BorealisProperty which, if successful, could impair development and/or operations. Thisis particularly the case in respect of those portions of the Borealis Propertyin which we hold our interest solely through a lease with the claim holders, assuch interest is substantially based on contract and has been subject to anumber of assignments (as opposed to a direct interest in the property). 

All of the mineral rights to theBorealis Property consist of "unpatented" mining claims created and maintainedin accordance with the U.S. General Mining Law. Unpatented mining claims areunique property interests, and are generally considered to be subject to greatertitle risk than other real property interests because the validity of unpatentedmining claims is often uncertain. This uncertainty arises, in part, out of thecomplex federal and state laws and regulations under the U.S. General MiningLaw, including the requirement of a proper physical discovery of valuableminerals within the boundaries of each claim and proper compliance with physicalstaking requirements. Also, unpatented mining claims are always subject topossible challenges by third parties or validity contests by the federalgovernment. The validity of an unpatented mining or millsite claim, in terms ofboth its location and its maintenance, is dependent on strict compliance with acomplex body of U.S. federal and state statutory and decisional law. Inaddition, there are few public records that definitively determine the issues ofvalidity and ownership of unpatented mining claims. 
***There are differences in U.S. and Canadian practices forreporting reserves and resources.***
Our reserve and resource estimatesare not directly comparable to those made in filings subject to SEC reportingand disclosure requirements, as we generally report reserves and resources inaccordance with Canadian practices. These practices are different from thepractices used to report reserve and resource estimates in reports and othermaterials filed with the SEC. It is Canadian practice to report measured,indicated and inferred resources, which are generally not permitted indisclosure filed with the SEC. In the United States, mineralization may not beclassified as a “reserve” unless the determination has been made that themineralization could be economically and legally produced or extracted at thetime the reserve determination is made. United States investors are cautionednot to assume that all or any part of measured or indicated resources will everbe converted into reserves. Further, “inferred resources” have a great amountof uncertainty as to their existence and as to whether they can be mined legallyor economically. Disclosure of “contained ounces” is permitted disclosureunder Canadian regulations; however, the SEC only permits issuers to report“resources” as in place tonnage and grade without reference to unit measures.

Accordingly, information concerningdescriptions of mineralization, reserves and resources contained in thisprospectus, or in the documents incorporated herein by reference, may not becomparable to information made public by other United States companies subjectto the reporting and disclosure requirements of the SEC. 
***We will be required to locate mineral reserves for ourlong-term success.
Because mines have limited livesbased on proven and probable mineral reserves, we will have to continuallyreplace and expand our mineral reserves, if any, if and when the BorealisProperty produces gold and other base or precious metals. Our ability tomaintain or increase its annual production of gold and other base or preciousmetals once the Borealis Property is restarted, if at all, will be dependentalmost entirely on its ability to bring new mines into production. 

The Borealis Property has anestimated nominal mine life of approximately ten years, which is based solely onpreliminary engineering studies and commodity price assumptions which may not becorrect. An increasing gold price or discovery of additional mineralizedmaterial could have the effect of extending mine life; while a decreasing goldprice could shorten mine life. 

***We do not insure against all risks which we may be subject toin our planned operations.
We currently maintain insurance toinsure against general commercial liability claims and losses of equipment. Ourinsurance will not cover all the potential risks associated with a miningcompany’s operations. We may also be unable to maintain insurance to cover theserisks at economically feasible premiums. Insurance coverage may not continue tobe available or may not be adequate to cover any resulting liability. Moreover,we expect that insurance against risks such as environmental pollution or otherhazards as a result of exploration and production may be prohibitively expensiveto obtain for a company of our size and financial means. We might also becomesubject to liability for pollution or other hazards which may not be insuredagainst or which we may elect not to insure against because of premium costs orother reasons. Losses from these events may cause us to incur significant coststhat could negatively affect our financial condition and ability to fund ouractivities on the Borealis Property. A significant loss could force us toterminate our operations. 
***Our directors and officers may have conflicts of interest asa result of their relationships with other companies.
Certain of the directors and officersof Gryphon Gold have served as officers and directors for other companiesengaged in natural resource exploration and development and may also serve asdirectors and/or officers of other companies involved in natural resourceexploration and development. For example, Richard Hughes is President ofKlondike Gold Corp. and a director of Alamos Gold Inc. Our Chief FinancialOfficer is now working part-time, he divides his attention between his role withGryphon Gold and acts as a part-time consultant for a company which is not inthe mining industry. Consequently, there is a possibility that our directorsand/or officers may be in a position of conflict in the future. 
***New legislation, including the Sarbanes-Oxley Act of 2002,may make it difficult for us to retain or attract officers and directors.
We may be unable to attract andretain qualified officers, directors and members of board committees required toprovide for our effective management as a result of the recent and currentlyproposed changes in the rules and regulations which govern publicly-heldcompanies. Sarbanes-Oxley Act of 2002 has resulted in a series of rules andregulations by the Securities and Exchange Commission that increaseresponsibilities and liabilities of directors and executive officers. We are asmall company with a very limited operating history and no revenues or profits,which may influence the decisions of potential candidates we may recruit asdirectors or officers. The perceived increased personal risk associated withthese recent changes may deter qualified individuals from accepting these roles.
***While we believe we have adequate internal control overfinancial reporting, we will be required to evaluate our internal controls underSection 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from suchevaluation could result in a loss of investor confidence in our financialreports and have an adverse effect on the price of our shares of common stock.
Pursuant to Section 404 of theSarbanes-Oxley Act of 2002, we expect that beginning with our annual report onForm 10-KSB for the fiscal year ended March 31, 2008, we will be required tofurnish a report by management on our internal controls over financialreporting. Such report will contain, among other matters, an assessment of theeffectiveness of our internal control over financial reporting, including astatement as to whether or not our internal control over financial reporting iseffective. This assessment must include disclosure of any material weaknesses inour internal control over financial reporting identified by our management. Suchreport must also contain a statement that our auditors have issued anattestation report on our management’s assessment of such internal controls.Public Company Accounting Oversight Board Auditing Standard No. 2 provides theprofessional standards and related performance guidance for auditors to attestto, and report on, our management’s assessment of the effectiveness of internalcontrol over financial reporting under Section 404. 

While we believe our internal controlover financial reporting is effective, we are still compiling the system andprocessing documentation and performing the evaluation needed to comply withSection 404, which is both costly and challenging. We cannot be certain that wewill be able to complete our evaluation, testing and any required remediation ina timely fashion. During the evaluation and testing process, if we identify oneor more material weaknesses in our internal control over financial reporting, wewill be unable to assert that such internal control is effective. If we areunable to assert that our internal control over financial reporting is effectiveas of March 31, 2008 (or if our auditors are unable to attest that ourmanagement’s report is fairly stated or they are unable to express an opinion onthe effectiveness of our internal controls as of March 31, 2009), we could loseinvestor confidence in the accuracy and completeness of our financial reports,which would have a material adverse effect on our stock price. 

Failure to comply with the new rulesmay make it more difficult for us to obtain certain types of insurance,including director and officer liability insurance, and we may be forced toaccept reduced policy limits and coverage and/or incur substantially highercosts to obtain the same or similar coverage. The impact of these events couldalso make it more difficult for us to attract and retain qualified persons toserve on our board of directors, on committees of our board of directors, or asexecutive officers. 

 

 

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