Golden Phoenix Minerals, Inc. (the "Company") (OTC Bulletin Board: GPXM) has announced that its joint venture partner on the Mineral Ridge property, Scorpio Gold Corp., through its parent company, Scorpio Gold Corp., closed a debt financing transaction for up to an aggregate principal amount of $12 million, with the use of proceeds from the Scorpio Financing being designated to finance the Mineral Ridge project.
"We are very pleased with Scorpio's commitment to the Mineral Ridge Gold Project," stated Tom Klein, CEO of Golden Phoenix. "The additional $12 million of financing is expected to advance the project into commercial production."
The lender in the Scorpio Financing, Waterton Global Value, L.P. ("Lender"), required, among other things, certain agreements evidencing, guaranteeing and securing the Scorpio Financing, including a pledge of all of the assets and properties held by the joint venture entity that owns and operates the Mineral Ridge project, Mineral Ridge Gold, LLC (the "LLC"). The Company currently holds a 30% ownership interest in the LLC.
Accordingly, under the terms of the LLC's operating agreement, the Company's consent was required in order to permit such an encumbrance in the Lender's favor. In consideration for the Company's consent to the encumbrance and to mitigate the Company's risk of forfeiture upon a default by Scorpio, the Lender, Scorpio and the LLC agreed that the LLC would grant the Company a perpetual 20% net profits royalty interest in and to the production of minerals from the Mineral Ridge properties. Such royalty interest was recorded in the land records in Esmeralda County prior to the recording of a deed of trust in favor of the Lender securing its interest in the Mineral Ridge properties. Further disclosure regarding this transaction can be found in the Company's Form 8-K to be filed with the SEC as of the date of this press release.
Mr. Klein concluded: "Scorpio continues to be a strong partner for Golden Phoenix. That strength helps build success."
Source: Golden Phoenix Minerals, Inc.