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Golden Phoenix Minerals on trail of capital

John Seelmeyer

Armed with a couple of positive

reports from consulting firms, Reno’s

Golden Phoenix Minerals continues its

search for the capital it needs to develop

its Mineral Ridge gold mine in

Esmeralda County.

President Michael Fitzsimonds said

last week the company needs about $2.8

million $800,000 for the reclamation

bond that state and federal authorities

require and $2 million in working capital

to begin mining operations.

He said the company is working

with lenders to meet the capital

requirements.

Fitzsimonds said, too, the company

appears to be near clearing the other

major hurdle it faces on the Mineral

Ridge property approval of its reclamation

plan by state and federal officials.

The mining company president said

he expects the approval of regulators and

bankers soon.

The company has been frustrated in

the past, however. In the company’s

most recent annual report, Fitzsimonds

told shareholders that the company initially

expected to begin production at

Mineral Ridge in early 2001 after

Golden Phoenix purchased the mine in

late 2000.

“We did not take into account the

difficulty in obtaining the myriad of

permits and the regulatory requirements

that had to be met in order to go into

gold production,” he wrote.

But the company now says the delays

may have been a blessing in disguise

because its employees better understand

the mine and its challenges.

Golden Phoenix officials have said

the Mineral Ridge property involves

four parcels with the potential to be

economically mined. The property,

which would be mined in an open pit,

covers about 4.2 square miles.

Estimates have placed the gold

reserves on the property at 209,200

ounces an average of 0.079 ounces of

gold per ton of rock.

The company said last week that test

results on crushed rock from the area

show that industrial minerals, quartz,

feldspar, mica and calcite could be

recovered along with the gold.

DCM Science Laboratory in Wheat

Ridge, Colo., said the other minerals

from the mine could be sold for glass

making, fillers and chemicals.

“We believe that this unique

approach to our waste rock disposal

could add real value to the company and

its shareholders,” Fitzsimonds said.

Another positive report came from

the Knelson Group Inc. of Langley,

British Columbia, an outfit that specializes

in reducing the costs of gold

production.

The Knelson Group said its system

could recover 30 to 45 percent of the

gold mined at Mineral Ridge before

cyanide is added to complete the recovery

process. That would reduce the costs

and shorten the recovery time.

More than geology and processing

techniques have been demanding the

attention of Fitzsimonds and his team.

This summer, Golden Phoenix closed a

$1.8 million private placement, using

the money to pay operational expenses

and the costs of the interim reclamation

bond.

It also repaid $539,000 to Newmex

Minerals of Calgary. Newmex held a

lien on some Golden Phoenix assets,

hampering the Reno company’s ability

to finance its plans at Mineral Ridge.

Even so, the company’s financial condition

is less than vigorous.

As of June 30, Golden Phoenix

reported current assets of $417,801

against current liabilities of $1.07

million.

During that quarter, the company

posted a loss of $828,168 on revenues of

$34,449. This comes on the heels of

losses of $643,394 and $414,008 in the

two prior quarters.

Along with the Mineral Ridge property,

Golden Phoenix controls the

Borealis gold-silver property in Mineral

County and the Contact copper property

in Elko County.

The company has said, however, that

it’s devoted little attention to those

properties as it works on the Mineral

Ridge proposal.


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