INDEPENDENT CONTRACTOR AGREEMENT

INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (“Agreement”) is made and entered into as of December 18, 2006 (the “Effective Date”) between Dennis P. Gauger (hereinafter referred to as “Contractor”) whose address is 620 East 100 North, Alpine, Utah 84004, and Golden Phoenix Minerals, Inc., a Minnesota corporation with its principal executive office located at 1675 East Prater Way, Suite 102, Sparks, Nevada 89434 (hereinafter referred to as the “Company”).

WITNESSETH:

WHEREAS , the Company desires to obtain the services of Contractor as its Chief Financial Officer and in such other capacities as the Company deems appropriate;

WHEREAS , Contractor desires to perform services for the Company; and

WHEREAS , the Company and Contractor desire to set forth in the Agreement the terms and conditions of such relationship.

NOW, THEREFORE , in consideration of the mutual promises and covenants hereinafter set forth, the parties hereto do promise and agree as follows:

1.1          During the term hereof, Contractor agrees to use his best efforts and devote such time as may be reasonably necessary to perform the duties listed in Exhibit “A” hereto (the “Services”). Contractor agrees to report directly to the President, Chief Executive Officer, the Board of Directors and the Audit Committee of the Company and be readily available to consult with and assist the Chief Executive Officer and other management of the Company in the performance of their duties.

1.2          While Contractor has the right to enter into engagements to perform services for other entities, Contractor agrees that during the term hereof he will not perform any services for any entity which directly or indirectly competes with the Company or otherwise creates a conflict of interest. Contractor certifies that Contractor has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement, or that would preclude Contractor from complying with the provisions hereof.

1.3          Contractor shall conduct all of his business in his own name and in such manner as consistently exhibits high standards and integrity.

1.4          Contractor shall abide by the policies from time to time established by the Company.

1.5          Contractor agrees to perform all services under this Agreement in compliance with all applicable federal and state securities laws.

2.1          The Company agrees to pay Contractor in accordance with the schedule listed in Exhibit “B” attached hereto.

2.2          The Company shall exercise no control over the conduct of the Contractor’s business relating to the provision of services to companies or clients other than the Company, and the Company shall not be responsible for any act of the Contractor in the conduct of such business.

The parties hereto agree that the scope of Contractor’s agency hereunder is limited to performing the services identified in Exhibit “A” and that Contractor is not authorized to make any representation, agreement or contract, or incur any obligation or indebtedness on behalf of the Company of any kind, regardless of the nature thereof, except as authorized by the Board of Directors of the Company.

4.1           “Confidential Information” shall mean any and all information concerning any aspect of Company’s business or products including but not limited to the Company’s products, design information, engineering details, technical specifications, schematics, pricing data, production plans, business sources and strategies, stock profile/investor relations plans, customer lists, business opportunities, financial or marketing techniques, development plans, marketing plans, projects, processes, research materials, intellectual property, and other proprietary information related to the Company’s business that is not generally known to persons not associated with the Company (including, without limitation, information concerning “know-how”, products, product designs, manufacturing processes, techniques, product schematics, trade secrets, inventions, patents, source and object code, data, and works of authorship) or other business information disclosed by the Company either directly or indirectly in writing or orally or that Contractor becomes exposed to while performing Services for the Company.

4.2         Contractor will not, during or subsequent to the term of this Agreement, use the Company’s Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of the Company or disclose the Company’s Confidential Information to any third party. It is understood that said Confidential Information shall remain the sole property of the Company. Contractor further agrees to take all reasonable precautions to prevent any unauthorized disclosure of such Confidential Information. Confidential Information does not include information which (i) is known to Contractor at the time of disclosure to Contractor by the Company as

evidenced by written records of Contractor, (ii) has become publicly known and made generally available through no wrongful act of Contractor, or (iii) has been rightfully received by Contractor from a third party who is authorized to make such disclosure. Without the Company’s prior written approval, Contractor will not directly or indirectly disclose to anyone the contents of this Agreement.

4.3          Contractor agrees that Contractor will not, during the term of this Agreement, improperly use or disclose any proprietary information or trade secrets of any former or current employer or other person or entity with which Contractor has an agreement or duty to keep in confidence information acquired by Contractor, if any, and that Contractor will not bring onto the premises of the Company any unpublished document or proprietary information belonging to such employer, person or entity unless consented to in writing by such employer, person or entity. Contractor will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys fees and costs of suit, arising out of or in connection with any violation or claimed violation of a third party’s rights resulting in whole or in part from the Company’s use of the work product of Contractor under this Agreement.

4.4          Contractor recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Contractor agrees that Contractor owes the Company and such third parties, during the term of this Agreement and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out the Services for the Company consistent with the Company’s agreement with such third party.

4.5        Because the Company is a “public company” with its shares of common stock registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, the Confidential Information supplied to Contractor may be “material” information which has not yet been disclosed to the public markets. Consequently, Contractor may not trade (purchase or sell) the Company’s common stock in the public market so long as it is in possession of the Confidential Information which is “material” information which has not yet been disclosed to the public market by press release and/or in one of the Company’s filings with the Securities Exchange Commission.

4.6          Upon the termination of this Agreement, or upon Company’s earlier request, Contractor will deliver to the Company all of the Company’s property or Confidential Information that Contractor may have in Contractor’s possession or control.

Except as specifically set forth on Exhibit A attached hereto, Contractor agrees that it will from time to time during the term of this Agreement or any extension thereof keep the Company advised as to Contractor’s progress in performing the Services hereunder and that Contractor will, as requested by the Company, prepare written reports with respect thereto. It is understood that the time required in the preparation of such written reports shall be considered time devoted to the performance of the Services.

The Company shall reimburse Contractor for all reasonable expenses incurred by the Contractor directly related to the performance of his duties hereunder, including, without limitation, travel, lodging, meals, long distance telephone, and office supplies. Contractor shall be responsible for all other expenses related to the operation of his local office, including, without limitation, insurance, telephone, office supplies, professional licenses and dues, FICA, state and federal taxes, unemployment tax and disability insurance.

The relationship of Contractor to the Company is that of an independent contractor, and nothing contained herein or otherwise shall be construed in such a manner as to constitute Contractor as an employee of the Company. The Company shall not be responsible in any manner for Contractor’s Social Security withholding, federal or state income tax withholding, or any comparable unemployment law of any other appropriate state or jurisdiction and any other amounts required to be withheld or paid by an employer with respect to its employees under any applicable laws or regulations. Contractor agrees to obtain and maintain workers compensation insurance through out the term of this Agreement and to provide the Company with a certificate showing coverage within thirty (30) days of the date first written above.

8.1          This Agreement will commence on the Effective Date and will continue until December 31, 2007 (the “Initial Term”) or until termination as provided below. After the Initial Term, this Agreement will automatically renew for one (1) year terms unless notice of termination is provided thirty (30) days prior to the end of the then current term.

8.2        Notwithstanding the provisions of Section 8.1, this Agreement shall terminate immediately upon the breach of any covenant, representation, or obligation herein by either the Contractor or the Company.

8.3          Notwithstanding any other provision, this Agreement will terminate automatically without the necessity of written notice if any of the following events occur: