Ashdown Mine

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The Ashdown Gold/Molybdenum Mine and Mill The Road to Mahogany Mountain and the Ashdown Mine Golden Phoenix Minerals, Inc. April 28, 2005 The Story of Ashdown Golden Phoenix Minerals, Inc., a publicly traded mining company headquartered in Sparks, Nevada, is preparing for production at its Ashdown gold/molybdenum joint venture project located in northwestern Nevada. The Ashdown mine hosts a highly concentrated molybdenum deposit located within a 200-foot vein. The deposit, known as the Sylvia Vein, has been located, sampled, drilled and assayed, and is estimated to contain 2,125,000 pounds of available molybdenum in the form of molybdenite. Golden Phoenix intends to mine and mill the Sylvia Vein during the next 12 months, and sell the molybdenite Golden Phoenix Minerals, Inc. Page 1 as a concentrate through an existing life-of-mine brokerage contract with Derek Rafael & Company, Ltd. A small-scale mill, rated at 100 tons per day, is being permitted to process the concentrates. At an average grade of 5.8%, the mill is capable of producing approximately 295,800 pounds of concentrates per month. As manager and operator of the Ashdown mine, Golden Phoenix will receive 60% of the net proceeds from the sale of concentrate, valued at a price adjusted to market. For reference, the April Average Dealer Oxide price was $30.37 per pound. As managing operator of the Ashdown mine, Golden Phoenix is committed to bringing the Sylvia Vein deposit into commercial production and exploring for further deposits. History of Ashdown It is believed that the Ashdown mine was first operated sometime in the 1880s as a gold mine. About 52,000 ounces of gold averaging 0.31 ounces per ton was produced up to about 1942, at which time a shut-down was mandated by the L208 War Act, which redirected America’s mining efforts toward war-time needs. Modern exploration at Ashdown was initiated in 1980 when American Copper and Nickel Company (ACNC) purchased the Ashdown group of claims from the previous owners in exchange for royalty rights that are still current today. The Ashdown Mine In 1982, a Finnish mining company (OMI) entered into a joint venture with ACNC to explore and develop Ashdown. The joint venture drilled 270 reverse circulation holes into multiple targets and dug nearly 2,000 feet of tunnels (the Sylvia Golden Phoenix Minerals, Inc. Page 2 Decline) in the process of discovering and delineating a highly concentrated molybdenum deposit (the Sylvia Vein). 1,400 tons of bulk samples, averaging 2.9% molybdenum were excavated from the Sylvia Decline and are still located on property. In the process, OMI identified 325,000 tons of gold ore grading 0.152 opt, 146,000 tons of molybdenum ore grading 2.74%, and a 600,000-ton molybdenum resource grading 1.0%. Molybdenum Ore Stockpiled at Ashdown Following a series of transactions, Ashdown was acquired in 1987 by Win-Eldrich Mines Limited (WEX), a Canadian public company trading on the Toronto exchange. WEX performed extensive exploration and drilling that expanded the resource to 1.07 million tons at 0.088 opt gold. In the period from 1995 to 2002 declining gold prices caused a lack of interest in the project from potential joint venture partners. Several of the royalties disappeared, including those with ACNC and OMI. With rising gold prices, interest in the property was rekindled in 2003 with new agreements reached with Golden Phoenix, culminating in the existing joint venture. Golden Phoenix executed a Letter Agreement to Joint Venture with WEX in February 2004, naming Golden Phoenix manager/operator of the Ashdown mine and granting Golden Phoenix the right to earn a 60% titled interest in Ashdown by bringing the mine into production through investment and work-out. Golden Phoenix Minerals, Inc. Page 3 R29E R30E NV 140 R28E R29E 34 35 36 36 7 8 N 3 Co T45N un ty Ro ad 2 T46N T46N T45N S 18 17 1 2 1 ASHDOWN PROPERTY 19 0 1 Scale (miles) 2 20 ASHDOWN PROJECT US 10 11 12 11 12 95 Denio NV 0 14 McDerrmit US 93 15 P rojec t Boundary 14 29 0 I-8 13 14 13 Reno US 50 R29E R30E 22 23 24 23 R28E R29E ASHDOWN MINE SYLVIA MINE 32 31 T46N T45N R29E R30E US 95 6 US Road Tonopah 24 US 93 Coun ty ALDER 27 CREEK RANCH N 6 5 S No Scale US 95 5 I-1 26 25 26 25 ASHDOWN PROPERTY 34 35 7 8 Las Vegas US 95 FLOTATION MILL SITE R28E R29E Ashdown Project Humboldt County, NV T45N T44N 18 17 3 2 1 SYLVIA MINE & ALDER CREEK FLOTATION MILL Golden Phoenix Minerals, Inc Location of the Ashdown Property Details of the Ashdown Deposits Ashdown is located about 110 miles northwest of Winnemucca and 10 miles southwest of Denio Junction in Humboldt County, Nevada. The property is situated at an elevation of 4,700 feet on the northwest flank of the Pine Forest Range. It covers over three square miles and is controlled through 101 unpatented mining claims. The past work done on the property has identified potentially economic openpittable gold as well as high-grade underground molybdenum resources on the property. The most recent economic evaluation defined mineralized material of about 1.18 million tons of gold ore at 0.125 ounces per ton, and in a separate deposit, 146,000 tons of molybdenum ore averaging about 2.9% molybdenum. Both deposits are open for possible expansion of the mineralized inventory and numerous step-out exploration holes have identified strong mineralization calling for follow up drilling. Golden Phoenix Minerals, Inc. Alt US 30 93 ASHDOWN PROJECT AREA Winnemucca I-80 I-80 Elko Page 4 Golden Phoenix is currently targeting the high-grade molybdenum mineralization for development. These ores are comprised of molybdenum disulfide (MoS2) that will be separated through a standard floatation circuit and then sold as unroasted molybdenum concentrate. While previous sampling and drilling has identified mineralized material of potential commercial value in several sections of the property, Golden Phoenix will begin by concentrating on the Sylvia Vein, a strategic portion of the main structural zone that hosts an unusually concentrated molybdenum deposit. This vein has been sampled and delineated by both surface and underground drilling. A previous operator also completed approximately 375 feet of underground bulk sampling of this vein in 1982, after driving almost 2000 feet of access tunnels. More than $8,000,000 has been spent by preceding operators and Golden Phoenix to locate and systematically delineate the gold and molybdenum mineralization hosted at Ashdown. The Sylvia Vein Target Area 26: N 0.52% / 3.0 = $ 156 /ton 1.8% / 3.5 = $ 540 /ton 5.7% / 3.3 = $ 1,710 /ton 12.6% / 5.4 = $ 3,780 /ton 12.7% / 2.8 = $ 3,810 /ton 15.6% / 3.9 = $ 4,680 /ton 8.2% / 2.8 = $ 2,460 /ton 9.5% / 4.6 = $ 2,850 /ton 6.1% / 2.8 = $ 1,830 /ton 9.0% / 3.5 = $ 2,700 /ton 4.4% / 5.5 = $ 1,320 /ton 7.9% / 5.1 = $ 2,370 /ton 6.6% / 4.0 = $ 1,980 /ton 3.0% / 9.0 = $ 900 /ton 1.5% / 6.7 = $ 450 /ton 1.2% / 6.0 = $ 360 /ton 1.8% / 6.0 = $ 540 /ton SILVIA MINE SILL DRIFT ASSAYS & GEOLOGY VALUES / TON Mo = $15 / LB 28: 29: S 100 31: 33: 35: 37: 38: 39: 41: 43: 45: 48: 49: 51: 54: 55: The Sylvia Vein is well understood to be over 800 feet in length, a minimum of 4.5 feet in thickness, and to extend at least 300 feet down the dip of the structure. Its mineralization remains open to further exploration along its trace to the north, to the south, and at depth. The highest-grade section of the vein, Golden Phoenix Minerals, Inc. 0 50 Scale (feet) Page 5 measuring 200 feet in length, has been adjusted for an anticipated 30% mine dilution, and is calculated to contain 21,550 tons of mineralized material grading 5.8% Mo. Metallurgical testing indicates an expected process-recovery-factor of 85%, suggesting that this 200-foot section of the deposit contains approximately 2,125,000 pounds of potentially recoverable molybdenum. Sequence of Events Golden Phoenix will initiate production at Ashdown in the following sequence: • • • The mill will be constructed on private property located near the mine. The Sylvia Decline, which leads to the face of the Sylvia Deposit, will be repaired and additional drift driven as needed to reach the ore body. Over a period of months, the Sylvia Vein will be excavated using underground mining techniques, the ore will be milled and then concentrated, and the concentrates will be packaged for sale and delivery. Once the Sylvia Vein is reached, monthly production is estimated to exceed 250,000 pounds of concentrate for a period of at least seven months. The development of the pilot mill, including completion of permitting and assembly, and the excavation and processing of the Sylvia Vein, is forecast to take less than12 months from start to finish. Molybdenum Concentrate Sales Golden Phoenix has executed a life-of-mine brokerage contract with Derek Raphael & Company Ltd. of London to purchase all molybdenum-bearing concentrates produced from the Ashdown mine. The molybdenum within the mineralized body occurs naturally as molybdenite (MoS2). The MoS2 will be separated through an industry standard flotation circuit, and the resulting concentrates will be packaged into 4,000 pound “super sacks” for delivery FOB the mill site. The joint venture will be paid 99% of the Metals Week Monthly Average Dealer Oxide price, less a small roasting fee and any applicable discounts. For reference, the April Average Dealer Oxide price is $30.37 per Golden Phoenix Minerals, Inc. Page 6 pound. In accordance with the joint venture agreement between the partners, net proceeds from sales will be distributed 40% to Win-Eldrich and 60% to Golden Phoenix. Ashdown Underground Workings 5000 10,000 E 4900 9,000 E ' 00 51 48 00 47 50 4800 50 4650 ' 9,000 N 49 470 0' 50 00 50 N 50 ASHD OW N PRO JEC T 51 00 0' 200' 400' 51 50 S Scale (feet) Ashdown Surface Facilities 9,000 E 10,000 E ' 00 49 Water Tank Low Grade Moly Stockpile Ashdown Gold Mine 10-Level Portable Crusher & Crushed Rock Stockpile Du m p Shop Miners Dry Ex ist ing Sy lvia 10,000 N Mine Grid Gate Moly 1,400 Ore Stock pi Tons / ?.?? les % Mo W as te Sill Dri ft 50 Sylvia 49 00 Decline 4600 Storage Building O ffice Trailer Domestic W ater W ell 10,000 N M ine G rid 4650 4750 5200 4700 4 Level W ater Tank Low G rade M oly Stockpile 10 Level 8 Lev el Shop m Du p 49 00 Wa M oly 46 00 4650 s te ' Or e Sto ck 48 piles 00 12 -L ev el ne Sylvia Decli 48 50 470 0 47 00 48 00 47 50 47 50 4900 4950 48 00 48 4750 0 4750 Golden Phoenix Minerals, Inc. 4700 Fuel Storage Air Compressor e Min old n G el dow Ash 12-Lev 50 48 48 00 4650 La yd ow n Sylvia Decline Ar ea Pr op os ed 0 470 De cli ne N Transfer Ore Stockpile To S ape Esc ary n Shaft ond o Sec entilati &V Powder & Cap Magazines 200 Scale (feet) 400 SYLVIA MINE FACILITIES Ashdown Mill Facility Page 7 A Compacted Trench Backfill Launder at -5% grade from mill building to pond. Tailings Surge Tank Thickener Classifier Chain Link Fence A' Disk Filter 60 mil HDPE Liner 12" Reworked or Imported Liner Bedding Layer Reclaim Water Tank max vol = 13,817 gal. Concentrate Bin Sump Section A - A' LAUNDER CONFIGURATION South Cell Berm Looking East Scale: 1" = 10'-0" C 8" Tailings Discharge Line 2" Reclaim Water Line Launder one piece 10-guage steel plate 32" wide x 8" high welded in 8' sections C' 42" Railing B Chain Link Fence 2" Water Line To Mill Reclaim Tank Compacted Trench Backfill Steel Grate Walkway I-beam Deck Support Steel Grate Cover B' Concrete Collection Base 5' x 5' x 6" Reinforced Slab 4 - #4 Rebar, each way 12" Gravel Base 60 mil HDPE Rub Sheet 60 mil HDPE Liner 12" Reworked or Imported Liner Bedding Layer Section C - C' LAUNDER SECTION Looking East Scale: 1" = 2'-0" 2" Water Line 30" Galvanized Culvert Slotted Wrapped w/ Geotextile Sump Pump Section B - B' RECYCLE SUMP CONFIGURATION North Cell Berm Looking East Scale: 1" = 10'-0" Alder Creek Ranch Pilot Mill Humboldt County, NV Figure 11: File: Fig11_Decant_Col Xref: Drawn by: elf 01/07/05 Revised: TAILINGS DISCHARGE & RECLAIM WATER SYSTEM SECTIONS Golden Phoenix Minerals, Inc Ashdown Tailings Impoundment Sediment Trap Powe rline Monitor Well B Reclaimed Water Return Line Walkway Decant Column B' Harne y Ele ctric Coop 15' Rera tive O-W , Inc. on ea ch sid e of powe rline Tailings Impoundment Spigot Pole 88 Spigot Tailings Discharge Pipe Spigot Office Trailer Spigot A Spigot Cattle Guard 300 Ton Stockpile Tailings Discharge Pipe C ss ad Ro Launder C' A e cc Flotation Plant Crushing Circuit Reclaim Water Tank Deck Elevated 8' w/ Tailings Surge Tank Thickener Disc Filter Classifier Monitor Well Fuel Storage Water Tank A' Auxillary Generator Water Well Diversion Ditch Sec. 35, T45N, R28E Sec. 2, T44N, R28E EXPLANATION Stock Fence (around facilities) Chain Link Fence (around tailings pond) Diversion Ditch File: Fig10_AC_Tailings.dwg Xraster: Ashdown2.tif N Alder Creek Ranch Pilot Mill Humboldt County, NV Figure 10: Cross Section Location in Figure 11 C C' TAILINGS STORAGE CELL PLAN MAP Revised January 2005 Golden Phoenix Minerals, Inc. 0 25 Scale (feet) 50 S Drawn by: elf Revisions: 01/03/05 Golden Phoenix Minerals, Inc. Diversion Ditch FEE: Alder Creek Ranch U.S. BLM Existi ng Page 8

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