Golden Phoenix strikes back and asserts its rights at
Steven Ralston, CFA
Golden Phoenix Minerals (
announced the removal of Scorpio Gold (SGN: TSX-V) as the manager
of Mineral Ridge gold project in Nevada. Officially, Scorpio will
be removed and Golden Phoenix Minerals will be appointed manager at
a Special Meeting of the MRG Management Committee to be held in Las
Vegas later this week.
It was the failure of Scorpio Gold to achieve commercial production
at Mineral Ridge that precipitated Waterton Global Value LP to deny
Golden Phoenix access to the third tranche of funding under the
Senior Secured Gold Stream Credit Agreement, which in turn resulted
in the inability of Golden Phoenix to make a payment in
mid-December 2011 pursuant to the Santa Rosa Acquisition Agreement.
This failure to perform by Scorpio Gold and for continuing to fail
in the performance of material obligations for a period of sixty
days after given notice in early February are cited by Golden
Phoenix as the raison d'être for the necessary change in manager at
the Mineral Ridge mine.
Golden Phoenix intents and expects mining operations to continue
without interruption upon its assumption of the duties as manager
of the operations. No changes are expected in current employees,
contractors and agreements at the Mineral Ridge mine.
True to its word, Golden Phoenix is vigorously protecting its
rights and interests through this action yesterday and previously
by filing a lawsuit against Scorpio Gold and Waterton Global Value
for 13 separate Causes of Action related to the Notices of Default,
which were received as a direct result of Waterton's refusal to
grant funding pursuant to the $15.5 million debt draw-down
facility, also known as the Senior Secured Gold Stream Credit
We maintain our Outperform rating on Golden Phoenix and reaffirm
our price target of $0.20.
To view a free copy of our most recent research report on GPXM
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