Golden Phoenix Minerals Issues President's Letter to Shareholders Following Release of Q3 Financials

2008-11-21 08:00 ET - News Release

SPARKS, Nev., Nov. 21 /PRNewswire-FirstCall/ -- Golden Phoenix Minerals, Inc. today issued the following letter to shareholders, posting it on its website: http://www.golden-phoenix.com. It follows in its entirety.

Dear Fellow Shareholders:

We live in extraordinary times. Was it really only three months ago I wrote to you of the successes of the Ashdown molybdenum mine and Golden Phoenix's plans for the future? Now, with the release of our Q3 financials, I address you in such different times and under such unexpected circumstances.

The global credit contraction, which first appeared in September and mushroomed into October, has taken a toll on each and every one of us, whether in our professional or our private lives. This credit squeeze has frozen up the usual flow of funding, the kind that businesses large and small rely upon every day to lubricate the gears of commerce. As these gears come to a grinding halt, uncertainty takes hold, and with it fear. That fear is reflected in our share price. And like a gigantic chain of dominoes, the consequence of market illiquidity comes home to roost.

The result of this deflationary lightening bolt has been the sudden suspension of metals consumption and with it the implosion of pricing. Molybdenum oxide, which was trading at $33 per pound as recently as late August, is now below $10, with the majority of the slide occurring in the past two weeks. So swift was the drop, that operating mines such as Ashdown were caught in the down draught with no choice but to adjust. It was with reluctance that Golden Phoenix, together with our partner Win-Eldrich, elected to put Ashdown into care-and-maintenance as the moly price plummeted below a sustainable level. The intention is now to preserve the assets in the ground, and await better times.

With this sudden shift has come the realization that of all the metals, base and noble, gold is hanging tough and showing the possibility of reviving first. General interest in our Mineral Ridge gold mine is on the rise, and we are fortunate to have this permitted and bonded asset in our portfolio. While cash remains precious, we were able to complete the first phase of our drilling program at Mineral Ridge before stopping in advance of winter. There are still hundreds of samples awaiting assay, but for now, management is focused on conserving cash through the reduction of our work force and elimination of non-essential spending.

We at Golden Phoenix continue to prepare for this economic winter, while holding firm to the anticipation of spring. In such times, it is good to remember that friends and family come first, and that recession brings with it not just challenges, but a heightened appreciation for the simpler things. We hope each of our valued shareholders will take the opportunity to slow down and reflect on the love and companionship in your lives. The outpouring of support we are receiving from so many of you is heartening and keeps us focused an optimistic.

We are working to implement solutions that can counteract the deflationary effects of the recession, and will keep you apprised of our progress.

    With best regards,
    Robert P. Martin
    President

    Please visit the Golden Phoenix website at http://www.Golden-Phoenix.com/

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 majority owner of the Ashdown Project LLC gold and molybdenum property held jointly by Golden Phoenix Minerals, Inc. and Win-Eldrich Mines, Ltd. of Toronto, Canada through its US subsidiary, Win-Eldrich Gold, Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements by Robert P Martin, President, and other statements regarding the expansion of production at the Ashdown Mine, optimism related to the business, expanding exploration and development activities and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market prices for the Company's mineral products. In addition, actual results could vary materially based on changes or slower growth in the molybdenum and gold markets; the potential inability to realize expected benefits and synergies in the Company's mining operations; domestic and international business and economic conditions; changes in the mining industry for base and precious minerals, especially molybdenum; unexpected difficulties in expanding production at the Company's mines; changes in customer demand or ordering patterns for molybdenum; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of skilled miners; the need for additional capital and other risk factors listed from time to time in the Company's Securities and Exchange Commission (SEC) filings under "risk factors" and elsewhere. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

     CONTACT:

     Robert P. Martin, President 775/853/4919
     [email protected]

     Equiti Trend 800/585/6988

     E&E Communications 949/707-5365
     [email protected]

Golden Phoenix Minerals, Inc.

CONTACT: Robert P. Martin, President of Golden Phoenix Minerals, Inc.,
+1-775-853-4919, [email protected]; or Equiti Trend,
1-800-585-6988; or E&E Communications, +1-949-707-5365,
[email protected], both for Golden Phoenix Minerals, Inc.

Web site: http://www.golden-phoenix.com/