Golden Phoenix joint venture partner Scorpio Gold has activated the leach pad for gold recovery at Mineral Ridge. Gold production, which is completely unhedged, is expected to reach a steady state by June and then continue to track positively in the second half of 2011. See March 1, 2011 press release. A three-phase drilling program is underway to expand the existing mineral resource base of 357,000 oz/au and target numerous gold-bearing zones and structures.

• In 2010, Golden Phoenix completed the sale of a 70% joint venture interest in its Mineral Ridge gold property to Scorpio Gold US.
• Golden Phoenix received gross proceeds in excess of US $7.5 million.
• These funds have allowed Golden Phoenix to extinguish debt and begin funding its next series of property acquisitions.
• Scorpio Gold will carry all finance costs to bring the project into commercial production.
• Scorpio Gold can increase its interest by 10%, to 80%, when the project reaches commercial production.
• Upon commercial production, Scorpio Gold will have a 24 month option to purchase Golden Phoenix’s remaining 20% interest. See the Company’s March 16, 2010 Form 8-k for additional details.

Three-Phase Drilling Program for 2011 Has Begun:
(source : www.scorpiogold.com)

Phase I drilling is designed to expand and upgrade the existing mineral resource estimate in the vicinity of the existing pits scheduled for mining this year. Phase II is designed to further expand the resource base and define additional open pits. Phase III is focused on a property-wide exploration scale to target numerous gold-bearing mineralized zones/structures discovered during the Company’s surface exploration program.

2011 Mineral Ridge drill map (source: Scorpio Gold)

2011 Mineral Ridge drill plan (source: Scorpio Gold)

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% Golden Phoenix and 70% Scorpio Gold US.

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%.

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, and water supply.

Tom Klein, CEO of Golden Phoenix, comments on the Mineral Ridge Gold Project:

“When Mineral Ridge begins production, it will represent how our business model advances projects from acquisition through development into production. We believe this will allow the market to more fully appreciate how our growth strategy can be replicated with our current portfolio of projects and future acquisitions.”

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, Chairman of Golden Phoenix, concludes:

“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.”