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Mineral Ridge Gold Project
On March 11, 2010, Golden Phoenix completed the sale of a 70% joint
venture interest in its Mineral Ridge gold property, together with related
assets, to Scorpio Gold Corporation.
Project Highlights:
•
Initial ownership: 30% Golden Phoenix, 70% Scorpio Gold US
•
Golden Phoenix received US $3.75-million cash plus 7,824,750
common shares of Scorpio Gold capital stock
•
Scorpio Gold will carry all finance costs to bring the property into
commercial production
•
Scorpio Gold can increase its interest by 10%, to 80%, by bringing
the property into commercial production within 30 months
•
Upon commercial production, Scorpio Gold will have a 24 month
option to purchase Golden Phoenix’s remaining 20% interest
Project Summary:
Golden Phoenix and Scorpio Gold's U.S. subsidiary have created Mineral
Ridge Gold LLC, a joint venture formed to own, explore, develop and
expand the historic Mineral Ridge gold property located in Esmeralda
County, Nevada. Initial ownership of the joint venture is 30-percent
Golden Phoenix and 70% Scorpio Gold US.
At the closing, Golden Phoenix received US $3.75-million in cash from
Scorpio Gold, net of advances made to date, plus an aggregate of
7,824,750 common shares of Scorpio Gold capital stock.
As a further condition of the sale, Scorpio Gold has also agreed to carry
all finance costs necessary to bring the property into commercial
production and, provided it does so within 30 months, will then have the
right to increase its joint venture interest by 10% to a total of 80%.
In the event Scorpio Gold qualifies for 80% ownership, it will also have the
option to purchase Golden Phoenix's remaining 20% interest for a period
of 24 months following the commencement of commercial production.
Robert Martin, President of Golden Phoenix, comments on the JV:
“Since the start of negotiations, our companies have worked hand-in-hand
to expand and enhance Mineral Ridge. Using our state-of-the-art drill rig,
Scorpio Gold has not only confirmed existing mineralization, but has
located new veins. They have aggressively staked surrounding claims so
that Mineral Ridge is nearly twice its original size and now covers known
mineralization which has never before been identified plus they will have
acquired and contributed or cancelled the existing net smelter royalty. Add
to this the approximately $30 million in established mining infrastructure, a
rising metal price, plus the bonding and permits which are already in
place, and I’d say we have the makings of a highly successful gold mine.”
Peter J. Hawley, CEO of Scorpio Gold Corporation, added:
“Since the beginning of our due diligence until now we have always
recognized the bigger picture of the project with respect to not only
expanding the gold mineralization base but the excellent economics
behind the operations resuming production as a low cost gold producer.
The Scorpio team has in the past with its parent company, Scorpio Mining,
demonstrated the cost effective and rapid turnaround from development to
production and has the expertise to do so in a timely fashion. The fact that
gold prices have moved to levels not seen before will only help to
enhance the overall economics of the project.”
Robert Martin concluded:
“Golden Phoenix has entered a new phase of its redevelopment. Upon
commencement of this JV, Mineral Ridge will have the potential to return
to gold production quickly and efficiently under the expert guidance of
Peter J. Hawley and his Scorpio staff, and Golden Phoenix will have
recharged its operating account and provided its shareholders a
significant stake in Mineral Ridge’s future.
Equally important, with Scorpio handling operations, our officers and
staff will be freed up to aggressively pursue new mining
opportunities both in the United States and abroad. I am proud that
Golden Phoenix has weathered the credit contraction and is powerfully
positioned to take full advantage of a rising gold market.”
About the Project
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 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. 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
currently being prepared. The dry climate and non-acid generating
character of the rock should offer favorable conditions for mining and
reclamation operations.
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