Golden Phoenix buys mine

Denver — Reno, Nev.-based Golden Phoenix Minerals (GPXM-O) has succeeded in its bid for the Mineral Ridge mine in southern Nevada.

To acquire the past-producer from federal bankruptcy court, the junior must pay US$225,000.

“The purchase fulfills our goal of converting Golden Phoenix into an operating mining company,” says President Michael Fitzsimonds.

The open-pit, heap-leach operation has a checkered history. Production began in June 1997 under the ownership of Vancouver-based Cornucopia Resources. Capital costs were US$17 million at the time. However, the project never reached commercial production levels, and closed in December of that year.

In October 1998, Vista Gold (VGZ-X) acquired the mine from Cornucopia for US$500,000. The Denver-based company restarted production in February 1999, only to shut down about a year later, again owing to low output levels. Vista then placed its Mineral Ridge subsidiary under bankruptcy protection.

Earlier this year, the bankruptcy court sold all trucks and movable equipment associated with the operation. With the transaction, Golden Phoenix acquires all the processing equipment, shops and offices. The company intends to restart operations with the help of a contract miner.

The acquisition comes with no debt, though the company expects to see the property’s reclamation bond increased. Under Vista’s direction, the bond was US$1.6 million.

Golden Phoenix estimates it needs US$3 million to restart production and continue mining for the next six months. About half that amount is already at the company’s disposal.

Reserves at the 4.2-sq.-mile property stand at 4 million tons averaging 0.06 oz. per ton, or 240,000 oz. gold.