GRYPHON GOLD CORP

On July 29, 2013 Gryphon filed a voluntary Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of Nevada (Case No. 13-51496). It remains in control of its assets as a debtor-in-possession. The filing does not say what happens to shareholders' stock; the Waterton debt and the 60% Borealis sale to Waterton's affiliate precede this. William B. Goodhard signs as Interim CEO.

bankruptcy or receivership

On January 30, 2013 Gryphon converted Borealis Mining into an LLC and assigned 60% of it (6,000,000 Class A units) to Waterton's affiliate Borealis Holdings LLC, in exchange for Waterton forgiving $17 million of the credit facility. Gryphon keeps 40%, must fund 40% of future capital calls (including an initial $4 million contribution and about $1.6 million of a proposed $4 million call), and faces dilution if it misses payments; if its stake falls to 10% or less it becomes a 3.5% net profit interest. Waterton appoints 3 of 5 Borealis managers. The facility was also raised by $3 million on January 18, 2013 (to $23 million total), then cut to a $6,650,000 balance repayable monthly through November 30, 2014 in cash, gold or Borealis units. Gryphon no longer wholly owns Borealis, its main project; this ends the full ownership noted in earlier filings and cuts monthly debt payments from $1.4 million to $0.4 million.

material agreement

On September 24, 2012 Gryphon and Borealis Mining agreed with Waterton to raise the senior gold stream facility by $5 million, from $15 million to $20 million. Repayments now run monthly from December 2012 to November 2014, starting at about $50,000 a month and rising to about $900,000 a month from March 2013. In return, the supply agreement was amended so Waterton can buy all of Gryphon's production at a 3% discount to spot prices. This adds debt and gives away part of the sales price; it also changes the original repayment schedule of 12 payments from month 13.

material agreement

On April 18, 2012 Gryphon signed the $15,000,000 senior secured gold stream credit agreement with Waterton, and the full amount was advanced April 19, 2012. It is intended to repay the $1.5 million bridge loan, prepay the $3 million and $4.5 million 2011 debentures (notice given that they will be prepaid in full effective May 4, 2012) and develop Borealis. It carries 5% interest and a 1% fee, repayment is in 12 equal monthly payments from month 13 valued at 80% of spot gold (paid in gold or, if Waterton asks, cash), and covenants bar new debt, liens, asset sales, distributions and a change of control. Waterton also has the right to buy all Borealis gold and silver production at market rates until operations cease, and received 14,062,500 warrants at C$0.16 for 3 years. This resolves the refinancing thread for the 2011 debentures but puts the project's output and a change-of-control restriction under one lender, and adds dilution.

capital raising announcement

On March 20, 2012 Gryphon borrowed $1,500,000 from Waterton Global Value at 15% interest, repayable May 19, 2012 (earlier if Waterton provides a senior facility), secured first-ranking over assets of Gryphon and Borealis Mining. It also signed a non-binding letter of intent for a $15,000,000 senior secured gold stream facility (5% interest, 1% fee, repayable in 12 monthly payments in cash or gold from month 13, valued at 80% of spot gold, with 14,000,000 more warrants to Waterton) and a gold and silver supply agreement giving Waterton a right to buy Borealis production. Holders of over 66⅔% of the July and November 2011 debentures agreed to amendments and to rank behind the bridge loan, in return for about 15,000,000 warrants at $0.164 (14,958,000 issued March 22, 2012) for 18 months; Waterton got 1,500,000 warrants at C$0.1862 for 3 years. This follows the 2011 short-dated debentures and adds new dilution; the note repayment depends on the senior facility being drawn.

capital raising announcement

On November 22, 2011 Gryphon closed a CAD$4,479,000 private placement of 4,479 units, each a CAD$1,000 10% subordinated secured debenture maturing November 22, 2012 plus 750 warrants at US$0.40 (3,359,250 in total, expiring May 22, 2013). These are secured over Gryphon's assets, including the Borealis Mining shares, but rank behind the July 2011 CAD$3,000,000 debentures and any senior credit obligations. Agents received a CAD$291,135 fee (6.5%). The filing does not state a use of proceeds; it continues the pattern of short-dated secured borrowing started in July.

capital raising announcement

On July 27, 2011 Gryphon closed a CAD$3,000,000 private placement of 3,000 units, each a CAD$1,000 10% secured subordinated debenture maturing July 28, 2012 plus 1,500 warrants at US$0.20 (4,500,000 warrants in total, expiring January 27, 2013). The debentures are secured over Gryphon's assets, including a pledge of 100% of Borealis Mining Company's shares, with Computershare as trustee; agents were paid CAD$180,000 (6%). Proceeds are stated to be for equipment, power at Borealis and working capital. This adds secured debt due within a year on top of the May 2011 equity raise, and a change of control triggers a 110% repurchase offer.

capital raising announcement

Effective May 20, 2011 Gryphon exercised the Borealis royalty option, fixing the lessors' royalty at 5% in place of the earlier sliding-scale royalty. It paid $150,000 cash, 7,726,500 shares at a deemed $0.40, $1.6 million of 5% promissory notes due 2013 and $1,909,500 of 5% convertible notes due 2014 (convertible at $0.70, rising to $0.80 and $0.90). This resolves the royalty option thread, following the May 2011 equity raise, but it creates new debt, and if Gryphon defaults on note payments and fails to cure within 120 days, the royalty reverts to the old terms. The terms differ from Amendment No. 4's February schedule (5,000,000 shares and $3 million of convertible notes).

capital raising announcement

On May 13, 2011 Gryphon signed an underwriting agreement with Roth Capital Partners and Acumen Capital to sell 80,000,000 shares at $0.125 (CDN$0.12) for about $10 million gross, closed May 18, 2011. Acumen took a further 6,000,000 shares (about $750,000) under its over-allotment option, and Roth may buy up to 6,000,000 more until June 10, 2011. Proceeds are intended to start oxide heap leach operations at Borealis, including facilities, equipment, reclamation bonding, hiring and four months of mining operations. This is a large issue relative to the roughly 96 million shares outstanding in January, so it heavily dilutes existing holders, and it delivers the registration and financing Gryphon had been seeking since Sage left. The underwriters also get warrants at $0.30 from November 10, 2011 and a 6% fee.

material agreement

On February 22, 2011 Gryphon and the Borealis lessors signed Amendment No. 4, extending the option to fix the royalty at 5% month-to-month to August 22, 2011 for $25,000 a month. Gryphon agreed to exercise the option within ten business days of closing any financing of $8 million or more, and the option ends if not exercised by August 22, 2011. The exercise price is now stated as $7,000,000 (less $250,000 already paid), payable as $125,000 cash, $1.6 million of two-year 5% promissory notes, 5,000,000 shares at a deemed $0.40, and $3 million of three-year 5% convertible notes (convertible at $0.70, $0.80, then $0.90). This continues the royalty option thread and replaces the earlier lower-priced terms ($1.75m cash, 7,726,250 shares, $1,909,500 debenture). Note the filing's own text is inconsistent on cash (the press release says $150,000).

material agreement

On January 21, 2011 Gryphon closed a private placement of 6,500,000 units at Cdn$0.20 for Cdn$1,300,000 gross. Each unit has one share plus half a two-year warrant at US$0.30, and dealers were paid Cdn$69,161. Proceeds fund exploration and development and general corporate purposes, and shares outstanding are 96.4 million after closing. New shares dilute existing holders, and Gryphon owes a registration statement within 120 days.

capital raising announcement

On August 16, 2010 Gryphon, Borealis Mining and Sage signed an agreement ending the Sage option and subscription agreements, and a joint release says both sides mutually agreed to end the option. Gryphon says it incurred no material termination penalties. Sage will not earn a 50% joint venture interest in Borealis, so the option route to funding Borealis is closed; the filing does not say what happens to Sage's US$200,000 already invested in units.

farm in farm out agreement

On April 23, 2010 Gryphon sold all of Nevada Eagle Resources LLC (the Nevada subsidiary bought in August 2007, with interests in about 53 prospective gold properties over 70 sq miles) to Fronteer Development (USA) Inc. for $4.75 million: $2.25 million cash plus Fronteer taking over the $2.5 million Baughman convertible note due March 30, 2012. The filing says the assumption has the same practical effect on Gryphon as repaying and cancelling the note, and that Gryphon sold to focus on its Borealis gold project. This resolves the Baughman note thread and the Nevada Eagle acquisition, leaving Borealis as the project named in the filing.

asset acquisition disposition

On February 23, 2010 Gryphon signed a binding letter of intent letting Sage Gold Inc. earn 50% of the Borealis project. Sage paid US$100,000, will invest US$400,000 in a Gryphon private placement, and if it exercises its option would put US$9 million into a joint venture, give Gryphon US$1 million of Sage shares or cash, and pay up to US$2 million more for additional reserves. The option runs to December 31, 2010 (extendable up to six months), subject to a definitive agreement, due diligence and TSX/TSX Venture approval. Gryphon would give up half of its main project if Sage exercises; this is a new partner for the Borealis financing that management had targeted for late 2009.

material agreement

On February 18, 2010 Gryphon closed its private placement, issuing 10,897,353 units at Cdn$0.17 for gross proceeds of Cdn$1,852,550. Each unit is one share plus half a two-year warrant at US$0.25; dealers got Cdn$168,385 in commissions and 990,500 compensation options at US$0.21. The press release says proceeds fund exploration and development and general purposes, including a US$500,000 payment to the convertible note holders (described there as due March 30, 2012). After the closing there are 85.1 million shares and about US$2.1 million cash. New shares dilute existing holders. (Item 3.02 sale of unregistered securities; the record lists it as a listing compliance notice but the text shows no listing issue.)

listing compliance notice

Gryphon Gold bought time on the $5 million convertible note it still owed the Baughmans from its 2007 Nevada Eagle purchase, which was due at the end of March. The price was 1.5 million shares plus a cut in the note's conversion price from $1.00 to $0.60 - cheaper than repaying, and far more dilutive.

capital raising announcement

On February 8, 2010 Gryphon released a press release titled 'Partial Reduction and Amendment of Convertible Note and Update on Private Placement'. The 8-K text gives no terms; the title shows the Baughman convertible note was partly reduced and amended, and the context from the exhibit-only filing says it involved 1.5m shares and a lower conversion price. It ties to the private placement in the January 22 filing.

capital raising announcement

On December 29, 2009 Gryphon released a press release titled 'Board of Directors forms Special Committee to Advise the Board on Business Combination Opportunities'. The 8-K text gives no details (members, counterparties, terms); only the exhibit title shows the board set up a committee to advise on business combinations. This adds to the earlier Matter & Associates sale/merger mandate.

business combination

At the September 3, 2009 annual meeting, all five director nominees (including John Key and Gerald Baughman) were elected and the auditor appointment was ratified, with 45.81% of shares present. The CEO told shareholders the company is looking at financing to put Borealis into production, that construction this fall would need financing complete by the end of October, and that a convertible debt structure is preferred. A New York investment bank has been engaged, and a special meeting with four items was called, details in a proxy filed September 10, 2009.

resource reserve update

Gryphon announced on July 8, 2009 that it is extending the 2007 warrants (9,486,500 shares, 15% of basic shares outstanding, none held by insiders) from expiry dates in August-December 2009 to December 31, 2009. The exercise price drops from the earlier C$1.25 to C$0.18 until September 20, 2009 and C$0.40 after that, effective July 22, 2009 subject to regulatory approval. For shareholders, this lets the warrant holders buy shares far below the original price, which could mean new shares and dilution if exercised.

security holder rights change

On August 20, 2008, Gryphon's subsidiary Borealis Mining Company paid $250,000 for an option to change the Borealis mining lease, replacing the sliding royalty (gold price divided by 100, i.e. 8% at $800 gold) with a fixed 5% net smelter royalty, and to extend the lease by eight years if condemnation drilling is satisfactory. Exercising it costs $7 million in total, including the $250,000 already paid, $1.75 million cash, 7,726,250 shares issued at a deemed $0.40 and a convertible note of $1,909,500 after the lessors chose extra shares in place of part of the original $3 million note. The option runs 12 months, extendable six months for $125,000, and the share and note issuance is subject to TSX approval, so shareholders face dilution if it is exercised.

material agreement

Tony Ker, who had been CEO through the 2007-08 filings, resigned as CEO effective July 21, 2008, for personal reasons with no disputes stated. John L. Key, COO since February 5, 2008, became CEO and a director at a US$186,000 salary, with bonuses of US$75,000 and up to US$150,000 tied to the Borealis Oxide Mine reaching production and meeting cost goals. Ker gets Cdn$12,500 a month for 12 months (any unpaid balance falls due if the company has US$3 million or more in cash after January 1, 2009), plus a four-month financial services agreement from September 1, 2008 with a 0.67% success fee on financings and 200,000 options.

material agreement

Gryphon closed the third and final tranche of the placement on December 14, 2007 with 182,500 units for Cdn$146,000. The total is 4,486,500 units for Cdn$3.589 million, short of the 6.8 million units (about $5.44 million) the earlier filing said it planned to issue. Proceeds are to fund exploration and development.

capital raising announcement

Gryphon closed the first two tranches of a private placement at Cdn$0.80 per unit: 3.254 million units (Cdn$2.603 million) and 1.050 million units (Cdn$840,000), 4,304,000 units and Cdn$3.443 million in total. Each unit has one share and one Series I warrant (Cdn$1.00 in year one, Cdn$1.25 after). Proceeds are for exploration, development and general purposes. The company planned up to 6.8 million units, with a third tranche expected December 4.

capital raising announcement

Gryphon completed the Nevada Eagle purchase on August 21, 2007, paying $2.5 million cash, 4,500,000 shares and the $5 million 5% convertible note due March 30, 2010. Nevada Eagle holds interests in 54 prospective gold properties in Nevada, 26 of them farmed out under lease and option agreements. The filing says these generate positive cash flow net of carrying costs. The required financial statements were not yet ready and were promised by amendment. This resolves the July 2007 agreement.

asset acquisition disposition

Gryphon closed a private placement of 5.0 million units at C$0.80 each for C$4.0 million, a lower price than the C$0.90 placement in February 2007. This initial notice gives only the headline numbers; an amended filing three days later adds the terms.

capital raising announcement

On July 4, 2007 Gryphon agreed to buy Nevada Eagle Resources LLC from Gerald and Fabiola Baughman for $2.5 million cash, 4,500,000 shares and a $5 million 5% convertible note due March 30, 2010. Closing was due by September 15, 2007 subject to conditions, including Mr. Baughman becoming Vice President of Corporate Development. The note is the debt later extended in 2010.

material agreement

Gryphon closed a private placement of 5.0 million units at C$0.90 for C$4.5 million. Each unit has one share and one warrant (C$1.10 in the first year, C$1.35 after, two-year term). A 7% cash commission of C$77,175 and options over 85,050 shares were paid on part of the units. The price is below the C$1.25 paid in March 2006, and the new shares and warrants dilute existing holders. The filing also references a quarterly results release for the period to December 31, 2006, with no figures given.

capital raising announcement

Gryphon closed a private placement of 5,475,000 units at Cdn$1.25 each, raising Cdn$6,843,750. Each unit has one share and one-half of a Class B warrant (Cdn$1.65 per share, until March 23, 2007), so shareholders face dilution. Agents get commissions of up to 7% plus Class C warrants for 280,500 shares at Cdn$1.40. This follows the February 2006 prospectus offering.

capital raising announcement