EXHIBIT 99.1
Golden Phoenix Signs Definitive Acquisition Agreement for Santa
Rosa Gold Mine, Panama; Creates New Joint Venture Company
SPARKS, NV,
SEPTEMBER 19, 2011 – Golden Phoenix Minerals, Inc. (the
“Company”) (OTC Bulletin Board: GPXM) is pleased to
announce the signing of a Definitive Acquisition Agreement (the
“Definitive Agreement”) to acquire a 60% interest, with
an option to buy an additional 20% interest, in the Santa Rosa gold
mine (“Santa Rosa” or “Mina Santa Rosa”)
located in Panama and owned by Silver Global, S.A., a Panamanian
corporation (“Silver Global”). Santa Rosa produced over
100,000 ounces of gold from 1996 to 1998 and was closed down due in
part to low gold prices.
Golden Phoenix
intends to acquire its initial 60% interest in Santa Rosa by
acquiring 60% of the share capital of a recently created company
under the name Golden Phoenix Panama S.A. (the “JV
Company”) formed with the specific purpose of holding,
operating, running and mining the exploration, extraction,
transport and benefit concessions (the “Concessions”)
that encompass Mina Santa Rosa.
Tom Klein, CEO
of Golden Phoenix comments: “The completion of our Definitive
Agreement establishes a solid framework from which we can begin the
process of advancing Mina Santa Rosa to production-ready
status.”
Tony Bonilla,
President of Silver Global comments: “We have worked closely
with Golden Phoenix the past 45 days to prepare a strong foundation
for the redevelopment and planned reopening of Mina Santa
Rosa.”
Upon signing
the Definitive Agreement, Silver Global shall start the process of
transferring ownership of the Concessions as well as all rights,
permits, licenses, environmental impact study, insurance, bonds,
surveys, documents, among other assets belonging to Silver Global
in connection with Mina Santa Rosa to the JV Company.
Under the terms
of the Definitive Agreement, Golden Phoenix shall earn-in to a 60%
interest in Santa Rosa with an option to acquire an additional 20%
interest after achieving certain milestones, in consideration for
$20,500,000 in cash over a period of approximately 12 to 15 months
(with the final earn-in to occur upon achieving commercial
production, anticipated to be within 18 to 24 months) and
$4,500,000 in shares of Golden Phoenix common stock (at a deemed
value of $0.18 per share, a premium to the current market price),
as well as certain preferential payments from cash flow out of gold
production. These payments are less those amounts previously paid
by Golden Phoenix to Silver Global ($500,000 in cash and $500,000
in capital stock of Golden Phoenix) in consideration for the 45-day
secondary due diligence review period, which concluded on September
17th, 2011.
The JV Company
will operate according to the terms of a Joint Venture Operating
Agreement (“JV Agreement”) that Golden Phoenix and
Silver Global have agreed to enter into on or before October 15,
2011, at which time the Definitive Agreement shall be merged with
and incorporated into the JV Agreement.
The payments
and earn-in will occur upon successful completion of certain
milestones, ensuring the project moves forward to commercial
production in the near term, as follows:
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$250,000 on signing the Definitive Agreement;
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$3,750,000 on signing the JV Agreement + $4,000,000
in Golden Phoenix common stock = 15% interest in JV
Company.
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$3,000,000 on successful completion of Environmental Impact
Study (required for the JV Company to commence exploration
operations) = Additional 10% interest in JV
Company.
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