Golden Phoenix Minerals, Inc. of Sparks is in talks to create a joint venture agreement with a Canadian company to restart gold production at the Mineral Ridge mine in Esmeralda County.
Vancouver-based Scorpio Mining Corp. has paid $50,000 for the right to study the possible deal for 15 days and can get another 45 days of study if it pays an additional $200,000.
Golden Phoenix in 2005 shuttered the 2,590-acre mine, which produced more than 700,000 ounces of gold from open pit and underground mining operations since its discovery in 1864. The company has owned the mine since 2000.
The mining property is about 32 miles west of Tonopah.
Under the proposed deal, Scorpio Mining would pay cash and stock for a 70 percent interest in the Mineral Ridge property and would be the operator. Scorpio could acquire an additional 10 percent interest in the mine by providing financing to bring the project back into production.
Golden Phoenix executives were careful to note, however, that they have no assurances the proposed deal will go through.
Still, David Caldwell, the chief executive officer of Golden Phoenix, noted that Scorpio Mining "has a proven operational history and a strong track record for securing capital."
Scorpio also is involved in exploration of silver properties in Mexico's Sinaloa State.
Because the proposed deal with Golden Phoenix provides Scorpio stock to the Sparks company, Caldwell said a joint venture would allow Golden Phoenix to share in any successes at the Mexican projects.
Shares of publicly traded Golden Phoenix were selling in the range of 3 cents to 3.5 cents last week. The 52-week high for the stock is 35 cents.
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