Golden Phoenix to use fresh equity to widen its operations

The $6 million in fresh capital raised by

Sparks-based Golden Phoenix Minerals marks

a key turning point for the publicly held company.

"We've saved the company," says President

Robert Martin."We got it back on two feet. Now

we can start building the company rather than

salvaging the company."

In part, the company had the good fortune

to be in the right place at the right time.

Its Ashdown Project molybdenum mine 115

miles north ofWinnemucca is cranking up production

just as Canadian mining investors are

paying more attention to the metal that's used

as an alloy in stainless steel.

Their interest follows a sharp price spike.

Trading at $3 a pound a couple of years ago,

molybdenum last week was priced at $29.

The Ashdown Project mine and mill,

Martin says, has shipped about $2.5 million

worth of molybedenite since it came on line late

last year.

"All of sudden,molybdenum is the hottest

thing in Toronto,"Martin says of Canadian mining

investors."We could have raised $12 million

or $15 million."

Instead, the company came away with $6

million in fresh equity in a private placement.

Sprott Asset Management Inc. of Toronto, which

assembled a molybdenum-based investment

fund, took the lead position with $3 million in

Golden Phoenix stock.

With the money, the company plans to:

* Undertake more exploration and development

of the Ashdown Project in northern

Nevada.

* Begin development of another potential

molybdenum mine in Ontario.

* Resume work at the Mineral Ridge Gold

Mine 32 miles west of Tonopah, which was shut

down in 2005 when the company ran into

financial trouble.

The company said last week that the exploration

around the Ashdown Project will use a

technique known as "induced polarization."

A contractor will send an electric current

through the ground along precise intervals.

Because different types of rock vary in the way

they conduct electricity, the company will be

able to create a three-dimensional model detailing

possible mineral deposits hundreds of feet

below the surface.

The new financing and widened scope

come as Golden Phoenix continues a history of

operating losses. In 2006, it posted a loss of $4.1

million compared with a loss of $5.9 million a

year earlier.

The company has rung up a deficit of more

than $35 million since its inception in 1997,

and its auditors have raised a flag about its ability

to stay in business unless it continues to

attract fresh capital and begins to operate at a

profit.

The stock was trading at 41 cents a share

last week on the Over the Counter Bulletin

Board system, about the middle of its range of

28 cents to 52 cents during the last 52 weeks.