SPARKS, Nev., Oct. 12 /PRNewswire-FirstCall/ -- Golden Phoenix Minerals, Inc. (OTC Bulletin Board: GPXM) is pleased to announce that Scorpio Gold Corporation (TSX-V: SGN) has entered into a binding agreement to purchase the current 8 percent net smelter royalty (NSR) which applies to 48 unpatented claims on the Mineral Ridge, Nevada property from the royalty owner, Mary Mining Trust, for US$3,000,000. Subject to regulatory approval and concurrent with acquisition of a joint venture interest in the Mineral Ridge property from Golden Phoenix Minerals, Scorpio Gold will pay US$3,000,000 in cash at the closing to acquire the royalty.
Robert Martin, President of Golden Phoenix, commented on this development, observing, "I consider the acquisition and subsequent extinguishment of the existing royalty a key factor in the on-going process of finalizing a joint venture agreement between Golden Phoenix and Scorpio Gold that can lead to the restart of gold mining activities at this historic Nevada property. In addition to the mine's advance state of development and the strengthening price of gold, this bold action will, in my opinion, contribute substantially to the joint venture's financial viability and upside potential."
Peter J. Hawley, CEO of Scorpio Gold, elaborated on the news, saying, "The purchase of this underlying royalty from Mary Mining Trust on the Mineral Ridge gold property will only help to enhance the economics of the project and allow the company to move quickly towards the finalization of a definitive joint-venture agreement with Golden Phoenix Minerals. The preparation of a 43-101 technical report, which will include a NI 43-101 resource estimate followed by a full feasibility study has been advancing rapidly with surface reverse circulation and diamond drilling of the mineralized open-pit areas nearing completion. In addition, metallurgical work being performed by Kappes Cassiday is well under way, with the bottle roll testing completed and assay results awaited from the 40 barrels of material from the mineralized leach pad material to determine if the leach pad still has recoverable gold."
Scorpio Gold has stated that given the property's existing permits, bonding, and infrastructure, Mineral Ridge is considered to be a potential turn-key mining operation and Scorpio Gold looks forward to the reactivation of mining operations in a relatively short period of time once the definitive agreement is in place with Golden Phoenix Minerals for the acquisition of a majority joint venture interest in the Mineral Ridge property and financing is arranged.
The Mineral Ridge project, a former producer, is located about 30 miles west of Tonopah, Nevada and has historically produced almost 575,000 ounces of gold which includes approximately 170,000 ounces from open pit and approximately 405,000 ounces from underground mining operations. The property is currently bonded and has been permitted for heap leach gold processing and production, and was in production as recently as 2005. The mine project comprises 65 patented and 130 unpatented mining claims covering 2,590 acres, and hosts multiple gold bearing structures, veins and bodies. It features a well-developed infrastructure consisting of roadways, power grid, heap leach pad, crushing circuit, ADR plant, water supply, maintenance shop, refueling and storage facilities and administrative buildings.
Scorpio Gold further reports that Mineral Ridge has had a clean operating history and no environmental, permitting, legal, taxation, marketing or political factors are known that may impact the mineral resource estimates to be outlined in the planned NI 43-101 technical report and the NI 43-101 feasibility report. The dry climate and non-acid generating character of the rock should offer favourable conditions for mining and reclamation operations.
Completion of the acquisition of an anticipated 70% joint venture interest in the Mineral Ridge property remains subject to a binding definitive agreement, regulatory approvals, required financing and other customary closing conditions. See Golden Phoenix's release of June 22, 2009 for more details of the Company's agreement with Scorpio Gold.
For more information on Golden Phoenix Minerals, please visit their corporate website at http://www.Golden-Phoenix.com/.
Golden Phoenix Minerals, Inc. is a Nevada-based mining company committed to deliver value to its shareholders by acquiring, developing and mining superior precious and strategic metal deposits in North America using competitive business practices balanced by principles of ethical stewardship. Golden Phoenix owns the Mineral Ridge gold and silver property near Silver Peak, Nevada and the Northern Champion molybdenum mine in Ontario, Canada.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements by Robert Martin, President, and other statements regarding optimism related to the business, expanding exploration and development activities and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market prices for the Company's mineral products. In addition, actual results could vary materially based on changes or slower growth in the molybdenum and gold markets; the potential inability to realize expected benefits and synergies in the Company's mining operations; domestic and international business and economic conditions; changes in the mining industry for base and precious minerals, especially molybdenum; unexpected difficulties in expanding production at the Company's mines; changes in customer demand or ordering patterns for molybdenum; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of skilled miners; the need for additional capital and other risk factors listed from time to time in the Company's Securities and Exchange Commission (SEC) filings under "risk factors" and elsewhere. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.
CONTACT:
Golden Phoenix Minerals, Inc.
Robert P. Martin, President (775) 853-4919
investor@golden-phoenix.com
SOURCE Golden Phoenix Minerals, Inc.
