Golden Phoenix Removes $2.4 Million in Debt From Balance Sheet; Sells Six Claims at Contact Mine
Friday July 7, 5:00 am ET
SPARKS, Nev., July 7 /PRNewswire-FirstCall/ -- Golden Phoenix Minerals, Inc. (OTC Bulletin Board: GPXM - News) is pleased to announce it has reached an accord with former joint venture partner, International Enexco Ltd., a Vancouver, British Columbia corporation (TSX: IEC - News), resulting in the removal of more than $2.4 million in Company liabilities from its balance sheet relating to the Contact Property located in Elko County, Nevada.
These liabilities represented accruals under the Joint Venture Agreement between Golden Phoenix and International Enexco dated January 28, 1998. Both parties acknowledged that the Agreement was terminated pursuant to clauses limiting liquidated damages to only those amounts paid to International Enexco while the Agreement was in effect. Consequently, all accrued unpaid liabilities were extinguished upon termination of the Agreement and will be reversed, resulting in a gain on extinguishment of debt of $2,420,643.
In compliance with its original Termination Notice effective January 22, 2005, Golden Phoenix had already executed a Quitclaim Deed conveying all mineral rights back to International Enexco, with no encumbrances remaining.
In a separate transaction, International Enexco completed the purchase of Golden Phoenix's remaining claims at the Contact Property. The parties agreed to exchange 100,000 free trading shares of International Enexco stock for the assignment of title to six unpatented mineral claims, known as the "Red Metal" claims, staked by Golden Phoenix in 2003. The sale was completed on June 27, 2006. IEC stock closed trading yesterday at $1.32 per share.
David A. Caldwell, President of Golden Phoenix, commented, "Resolution with International Enexco brings to a close one of the last outstanding items relating to our tenure at the Contact Property. It significantly improves our Balance Sheet at the same time that it provides ongoing upside potential relating to the Contact Property through the newly acquired International Enexco shares. We wish International Enexco the best of fortune as they continue to pursue the development of the Contact Property."
Golden Phoenix Minerals, Inc. is a Nevada-based mining company committed to deliver value to its shareholders by acquiring, developing and mining superior precious and strategic metal deposits in North America using competitive business practices balanced by principles of ethical stewardship. Golden Phoenix owns the Mineral Ridge gold and silver property near Silver Peak, Nevada, the Northern Champion molybdenum mine in Ontario, Canada, and is manager/operator and joint venture partner of the Ashdown gold and molybdenum property in Humboldt County, Nevada.
Visit the Golden Phoenix Web site at golden-phoenix.com
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