On July 4, 2007, the registrant, Gryphon Gold Corporation ("Gryphon"), entered into a membership interest purchase agreement (the "Purchase Agreement") with Gerald W. Baughman and Fabiola Baughman, as sellers ("Sellers"), and Nevada Eagle Resources LLC, a Nevada limited liability company ("Nevada Eagle"), under which Gryphon agreed to purchase all of the outstanding limited liability company interests of Nevada Eagle Resources (the "Acquisition"). Under the terms of the Purchase Agreement, Gryphon will acquire Nevada Eagle from the Sellers for the following consideration, payable on the closing date of the Acquisition (the "Closing Date"):

(a)     $2,500,000 in cash;

(b)     four million five hundred thousand (4,500,000) shares of common stock of Gryphon ("Common Shares"); and

(c)     a 5% convertible note in the principal amount of $5,000,000 (the "Convertible Note").

The Convertible Note, due March 30, 2010, bears interest at the annual rate of 5% and is convertible at the option of the holder into Common Shares at an initial conversion price of $1.00 per share during first the twelve month period following the Closing Date, $1.25 per share during the second twelve month period following the Closing Date, $1.50 per share thereafter and $1.75 per share if converted on March 10, 2007. The interest payments are due on a semi-annual basis beginning on January 1, 2008. In addition to the purchase consideration, the Sellers will be entitled to all revenues of Nevada Eagle (payable in cash, stock, or other consideration) calculated to be received and received on the Assets and Properties from January 1, 2007 through midnight on December 31, 2007.

In addition, Gryphon granted the Sellers registration rights under which Gryphon agreed to file (within the later of (i) 90 days of the Closing Date or (ii) any date in which Gryphon is required to file a registration statement for a third-party in connection with a financing or acquisition, but no later than 120 days of the Closing Date) a resale registration statement to register the Common Shares issuable at Closing and issuable upon exercise of the Convertible Note under the Securities Act of 1933, as amended.

Under the terms of the Purchase Agreement, the closing of the Acquisition is scheduled to occur on or before September, 15, 2007, and is subject to closing conditions, including:

(a)     accuracy of representations and warranties;

(b)     performance and compliance with, in all material respects, the agreements, covenants and obligations set forth in the Purchase Agreement;

(c)     material consents, approvals and actions of, filings with and notices to governmental and regulatory authorities;

(d)     receipt of certain consents (or in lieu thereof waivers) of third parties;

(e)     Sellers shall have executed a Lock-up Agreement under which the Sellers agree that for a period of three months following the Closing Date not to sale Common Shares issued or issuable under the Purchase Agreement and Convertible Note and, thereafter, to limit the sale of such Common Shares to 20% of the aggregate Common Shares issued under the Purchase Agreement and Convertible Note each quarter (with unsold Common Shares aggregating each quarter thereafter);

(f)     Mr. Baughman entering into an Employment Agreement for a term of one year, renewable by the parties, to serve as Gryphon's Vice President of Corporate Development; and

(g)     Sellers entering into a Non-Competition Agreement.

    Upon completion of the Acquisition, Nevada Eagle will become a wholly-owned subsidiary of Gryphon.

    The registrant issued a press release on July 6, 2007, announcing the execution of the Purchase Agreement. The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference in response to this Item 7.01.

1.     Press release dated July 6, 2007.

2.     Membership Interest Purchase Agreement dated July 4, 2007, Gerald and Fabiola Baughman, for Nevada Eagle Resources LLC (without Exhibits)