Golden Phoenix Minerals, Inc.
Beyond the Transitional Fulcrum
D. Stewart Armstrong
www.seacoast-consulting.com
December 21, 2007
In my most recent article, which can be found on my web site I wrote about the coiled spring concept; about the lemmings who are following the crowd over the cliff, especially in the precious metals sector. We addressed the idea that a coiled spring can explode at any time because of the pent up energy and one had best be prepared. Golden Phoenix (GPXN.OTCBB) has pent up energy.
I keep in close contact with Rob Martin, president of GPXM. He has kept me informed of the steady and continuous progress the company is making on all fronts. We talked about the concept of the coiled spring and I think we both agreed that Golden Phoenix could be at the epicenter of one of those events—regardless of its current share price.
A Prime Buying Opportunity
Before I get too far into this piece, I have to say that Golden Phoenix is a buy for my portfolio and therefore I am buying. There is no better way to say it. It is a prime buying opportunity in the $.20 to $.40 range. In a year from now we very well might be thinking that $.50 was an excellent entry level. I also have a pretty good idea that the future of this company is going to be much brighter than the past because of the projects, the people, the ability to finance, the willingness to promote and their INTEGRITY. Incidentally, the past has not been shabby in the least little bit! The endurance, perseverance, and talent, it has taken to move GPXM from way below “mining 101—ground zero” to where it is today would have brought most grown men to their knees. But no, Golden Phoenix has kept a blistering pace over the last two years which has led to a positive cash flow company with about 80 employees (many of them high up on the talent scale in this mining sector), a fully “paid for” molybdenum mine now producing two shipments per month (about $1,200,000 in sales), another high potential gold property called Mineral Ridge with 200,000 ounces reported in past feasibility studies, and on and on we go.
As we consider all of the things that this company has accomplished in the past two years, should we not consider if this business model will continue to be effective in the future? I think it is obvious that “hard workers working smart” in this sector (in any sector) are a key to success. I’ve said this in previous articles, which can be found in my archives at wwwseacoast-consultingcom (do a search for Golden Phoenix), and I am saying it again. I urge you to visit their web site wwwgolden-phoenixcom and plot their progress for yourself. Its all there in black and white along with running commentary and informative press releases.
I don’t need to quote you chapter and verse of their successes, their production, their profits, and their talent. It is all there for the taking. I feel my job is to offer you a few insights into the company and the people that I know personally. I would hope to motivate you to perform your own due diligence. If you proceed with this course of action, I can’t help but believe you’ll be motivated to participate in this company’s future. It really is exciting and more than anything—its real!
The Staff in Focus
Make no mistake about it, GPXM is an incredible turn around story in the making! Who has been behind this success? Well, look at the Company’s roster of mining talent and that should answer the question: Director and CEO Dave Caldwell, a founder of Nevada Pacific Gold and Trustee of the Northwest Mining Association; Director Ron Parratt, President and founder of gold explorer AuEX, and an immensely respected and trusted Nevada geologist; Director Kent Aveson, who recently left his position as head of Continuous Improvement at Barrick Goldstrike Mines to take charge at Ashdown as its GM; Director Dr. Corby Anderson, Principal Process Engineer for the Center for Advanced Mineral and Metallurgical Processing at Montana Tech; Director Jeffrey Tissier, a trained geologist and CPA currently serving as CFO of one of Nevada’s largest water authorities; COO Donald Prahl, 35 year mining veteran who broke gold production records as GM of Barrick’s Goldstrike Mine; VP Craig Patrick, whose credits include Phelps-Dodge, Kennicott, Asarco and Cyprus, now in charge of GPXM’s Corporate Development; and finally President Robert Martin, a shareholder-turned-manager with 30 years experience in business start-ups and “turn-arounds”.
Working along side this talent and expertise is another layer of technically competent professionals too numerous to mention. Yet because they are so vitally important to the company’s success, it’s a shame not to mention them by name. Suffice it to say, they have assembled a proverbial dream team of talent, and they continue to attract even more talent. Ask yourselves why this caliber of talent chooses GPXM. After all, they care about the projects with which their names are affiliated.
This team had the foresight to climb onto the molybdenum train just as it was leaving the station. They acquired the rights to 60% interest in Ashdown when the price of molybdenum oxide was about five bucks a pound, and made it the first primary “moly” mine to enter production since, presently selling $600,000 shipments of “moly” concentrates every few weeks while market prices for moly oxide are hitting $32 a pound. This mine has been operating for a year, and with Kent Aveson now taking the helm, I expect it to settle into steady profitability in 2008. With extraordinary timing, the company has used its molybdenum momentum to turn its finances around and prepare itself for the next step in the development of the company, one that is centered on gold.
A Closer Look
I’d like to list a few more positives about GPXM. They have a reported shareholder base of about 5,000, and routinely trades half a million shares a day—some more some less. That in itself makes it unique in the world of juniors. It must be noted that it has a large float, and as such may attract day-traders, but it has also attracted large institutional “buy-and-holders”, including the famed Sprott Asset Management folks out of Toronto, who are the leaders in molybdenum investment. John Embry, who many of you know, has his home base at Sprott.
But wait, I’m of the understanding that when we peer even closer through our one sided mirrored glasses, we will witness a very patient and loyal core group of high net-worth individuals who continue to hold a great number of shares for the long haul. They have total faith in the company and those shareholders form its backbone. There is good reason for their confidence. I believe they see in Golden Phoenix something quite special, especially from an historical perspective: A management team methodically assembled from some of the biggest mining operations in the world, all focused on the quiet, steady development of mineral producing properties.
Three Properties = More Positives
The Ashdown molybdenum project in Nevada is now in full swing and is producing a very high grade of “moly” in batches of two shipments per month averaging, as I mentioned earlier, well over $1,000,000. The best is yet to come. It is my understanding that they are endeavoring to double the production of this “moly” within the next twelve months making Ashdown a “cash cow” for both GPXM and its junior partner Win-Eldridge Mines, Ltd.
Besides Ashdown, there is Mineral Ridge which is a proven gold property. Again it is my understanding that this property will be explored in the very near future and the results could possibly be spectacular. After all, it was a high grade underground gold producing mine in the past. Behre Dolbear study from 2003 supports the presence of a reserve in the 200,000 oz range, and the company’s recent purchase of a state-of-the-art drill rig points toward the potential for resource-building exploration in 2008.
Then there is the Canadian property called Northern Champion, another moly project with great potential.
Fantasy, Non-reality and Misperceptions
The question that I am asked most frequently is: Why is the price so low?
1. Most of the juniors have gotten hammered for tax loss selling - GPXM is no
different.
2. Rumors and innuendo being spread “on the bull-boards”.
3. The market has been looking backward and not foreword
4. Arbitration questions unresolved lead to apprehension
5. Impatience by a few exceptionally vocal shareholders
6. People in fantasyland wanting “20 baggers” overnight because they are
loaded with debt.
Many of the misperceptions have to do with fantasy, non-reality, and a few impatient detractors making a whole bunch of noise. The fundamentals of the company could not be stronger. Yes, there is the arbitration issue that folks talk about, but in reality I cannot see any downside to this issue that the market has not factored into its share price. Let it go because it will simply work its way through the arbitration process. It is simply business protocol that is now in the hands of professionals who handle these things. It is not something I would be overly concerned about at this stage of the process. The partners are still working well together and everyone understands there is a need to address and participate in the common good.
Misperceptions Clarified
I can think of few projects and few companies that have been as misperceived as GPXM. Why is that? Well again, I have heard second hand that there is a small group bashing the stock on the bull boards. Dear reader, never go to the bull boards for information. If you want to be jerked around there are far easier and less time consuming ways of participating in this kind of self-destructive behavior. And usually on these boards there are but a few people who make a whole lot of noise and the rest of them are like, “duh, OK boss, whatever-you-say”.
I have never met a president of a company as assessable as Rob Martin. Call him if you are in a quandary or have a question. Leave the bull boards for those who relish innuendo and rumor, soap operas or for those who seek to create havoc among neophytes. All you have to do is to read the press releases over the past 18 months! Look at the pretty pictures and read the press releases and you will be as convinced as I am that this is a company worth backing up the truck for. (I thought the pictures were beautiful—especially of that incredible brand new Ingersoll Rand TH60 drill rig!)
You know, speaking of pretty pictures, I have to admire a company that has put the entire development of its “turnaround endeavors” in a visual format.
Strengths
December 19th Press Release: SPARKS, NV, December 19, 2007 - Golden Phoenix Minerals, Inc. (OTC Bulletin Board: GPXM - News) is pleased to announce the formation of Exploration Drilling Services, an in-house drilling department focused on the discovery, delineation and expansion of reserves at Company owned mining properties. A five-year lease with option-to-purchase has been executed with Atlas Copco for a new Ingersoll Rand TH60 drill rig. The Company expects delivery of the rig in February of 2008, with exploratory drilling to begin soon after.
This is absolutely huge! It coincides with the company strategy of being independent, cash flow positive, and in control of its own destiny.
A Photographic Legacy
When you make your living communicating about specific junior mining companies, you want to be darn sure of what is really occurring in a company. To repeat, the one thing that won me over was the web site that Rob Martin and crew put together on GPXM. Photo by photo the progress of the company was documented. Pictures don’t lie.
Sometimes it pays to be in the right spot at the right time with the right idea. That is exactly what happened to GPXM, especially in regard to their Ashdown molybdenum project. They have been leveraging that success to proceed back to their roots: Gold and Mineral Ridge.
But I have to tell you that there has been some gun-slinging, some epic battles, and of course the never ending workload.
Shareholders in Focus
GPXM has a reported shareholder base of about 5,000, and routinely trades half a million shares a day. That in itself makes it unique in the world of junior mining companies. It must be noted that it has a large float, and as such may attract daytraders, but it has also attracted large institutional “buy-and-holders”, including the famed Sprott Asset Management folks out of Toronto, who are the leaders in molybdenum investments. This is the same company where John Embry parks his car.
Mineral Ridge in Focus – Gold
The company began its life as a precious metals miner, and it has been sitting on a 100% owned asset called Mineral Ridge. Mineral Ridge has a long and colorful history, including having been owned by the Cord family of automobile fame. It’s reported past production exceeds 600,000 ounces of gold - not to mention its silver - and it is located in a proven gold and silver district of Nevada. It is a large property, containing several open pits and 50 miles of underground workings, and it is fully developed, with power, roads and buildings already in. Most important, it has never been systematically explored using modern techniques. It is fully permitted for leaching operations, and has had over $20 million in infrastructure invested in the last 10 years by a series of past owners. Best of all, because of several failed attempts to literally “force” it into a leach operation, when historically it was a profitable milling operation, Mineral Ridge has been off the radar screens for the last four years, and virtually untapped. It is the secret 50-carat diamond of which no one outside the company is aware!
But the management at Golden Phoenix knows all this. And they know a good mine when they see one. Already they are beginning to move, laying the foundation for the return of Mineral Ridge to gold and silver production; employing a grinding circuit in place of the ill-conceived leach system. They also know that there is huge, long-term exploration potential on this four square mile property.
Conclusion
The development of Mineral Ridge is really a key. Because for me, the real value of the company lies not solely in their “moly” assets, but also in their primary gold project — Mineral Ridge.
I will continue to watch Golden Phoenix carefully. I want to see in what direction they take the company next. Between Ashdown, Mineral Ridge, and Northern Champion they have remarkable exploration potential.
Millions of dollars in Molybdenum Production, Cash flow, Exploration Potential on all three properties, a loyal group of investors, a light-year leap of progress in 24 months, a brand new drill rig, an seasoned business model, all combined with an extraordinarily talented team of professionals make a statement for this company’s positive future.
Consider being a part of it because the future is now.
Until next time,
D. Stewart Armstrong
Consulting to the Junior Mining Sector
golden-phoenix.com
Disclaimer
Disclosure and Disclaimer by the Author: In the spirit of full disclosure, although D. Stewart Armstrong,
Seacoast Consulting, and or Seacoast Publishing, are independent entities, they may be employed by this
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www.seacoast-consulting.com , which is an Internet site in which the author is involved. Although the author
is an independent analyst, he is also a paid consultant by the Junior Mining and Exploration Sector. The
author is a private investor in the precious metals markets. He is not a board qualified or licensed investment
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