Golden Phoenix Signs Multi-Million Dollar Joint Venture With Scorpio Gold to Restart Gold Production at the Newly Expanded Mineral Ridge Mine

Golden Phoenix Minerals, Inc. (OTC Bulletin Board: GPXM) is pleased to report it has signed a definitive Joint Venture Agreement to sell a 70% interest in its Mineral Ridge Gold mine located in Esmeralda County, Nevada to Scorpio Gold Corporation (TSX-V: SGN) in exchange for an aggregate deemed purchase price of US $7.5 million in cash, stock and other considerations.

Under the Agreement, the sale of Golden Phoenix's 70% interest is subject to the satisfaction of certain conditions, namely, Scorpio Gold must complete certain financing efforts and also must receive the approval of the TSX Venture Exchange, a process, which has already been initiated and is expected to conclude in the first quarter of 2010. The Agreement assigns Scorpio Gold the right and initial responsibility, upon Closing, to fund, manage and operate the Mineral Ridge mine to the benefit of both partners. Further, assuming the Closing of the Agreement, the parties intend to concurrently enter into a Joint Venture Operating Agreement to own and operate the properties. Highlights of the Agreement include the following general points:

Golden Phoenix will receive US $3.75 million in cash, net of advances, and an aggregate deemed amount of US $3.75 million in Scorpio Gold stock, priced at CN $0.50 per share.
In addition to the parties each contributing their respective interests in the properties to the JV, Golden Phoenix will contribute to the JV its approximately US $3.0 million in bonding on the property, and Scorpio Gold will contribute its Net Smelter Royalty recently secured from the Mary Mining Trust for US $3.0 million.
All existing claims, including the 54 patented claims and 134 unpatented claims (total 188 claims) forming the original Mineral Ridge property and the 145 unpatented claims recently staked by Scorpio Gold adjacent to Mineral Ridge, will be consolidated, nearly doubling the size of the claim block to over 5,921 acres to be owned, developed and explored by the JV under the name Mineral Ridge Gold LLC.
An Area of Interest extending two miles outside the original 188 claims has been defined.
Scorpio Gold has agreed to carry all costs of bringing the mine into Commercial Production, defined as two consecutive quarters of throughput of products from mining operations averaging greater than 70% of the average life of mine projected capacity.
Scorpio Gold may elect to finance 120% of the estimated cost, but is not obligated to spend the entire 120%, to put the mine into Commercial Production in exchange for receiving an additional 10% interest in the JV, eventually resulting in an 80/20 ownership between Scorpio Gold and Golden Phoenix respectively. Regardless, Golden Phoenix's interest will be fully carried by Scorpio Gold for at least 24 months, or to Commercial Production, whichever comes first.
Scorpio Gold will hold an option to purchase Golden Phoenix's remaining ownership interest for up to 36 months following the establishment of Commercial Production. If the option is exercised, the purchase price will be based on a Net Asset Value (NAV) calculation to be determined at that time by the independent valuation firm of Marshall Stevens, Inc. pursuant to the terms of the Operating Agreement.
Robert Martin, President of Golden Phoenix, commented on the JV, "Since the start of negotiations six months ago, 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."

Mr. 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."