Exhibit 10.4

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CONSENT, WAIVER AND SUBORDINATION
 
THIS CONSENT, WAIVER AND SUBORDINATION (this “Agreement”), dated as of August 3,
2011, is made by and among MINERAL RIDGE GOLD, LLC, a Nevada limited liability
company (the “Company”), GOLDEN PHOENIX MINERALS, INC., a Nevada corporation and
a member of the Company (“GPXM”), and SCORPIO GOLD (US) CORPORATION, a Nevada
corporation and a member and manager of the Company (“Scorpio US”) for the
benefit of WATERTON GLOBAL VALUE, L.P., by the general partner of its general
partner, Cortleigh Limited (together with its successors and assigns, the
“Beneficiary”).
 
W I T N E S S E T H:
 
WHEREAS, Scorpio US owns 70% of the ownership interests in the Company and GPXM
owns 30% of the ownership interests in the Company (all of GPXM’s ownership
interest in the Company at any point in time being, the “GPXM Interest”); and
 
WHEREAS, Scorpio US and GPXM are parties to that certain Operating Agreement for
Mineral Ridge Gold, LLC dated as of March 10, 2010 (as amended or modified, the
“Operating Agreement”), which governs the management, operation and
administration of the Company; and
 
WHEREAS, Scorpio US, GPXM and Scorpio Gold Corporation (“Scorpio”) are parties
to that certain Exploration, Development and Mining Joint Venture Members’
Agreement and Limited Liability Company Operating Agreement dated December 31,
2009 (as amended or modified, the “Members’ Agreement”, and together with the
Operating Agreement, the “Company Agreements”), which pertains to certain
Company operational matters and restrictions; and
 
WHEREAS, GPXM has entered into that certain bridge loan agreement with the
Beneficiary (the “Bridge Loan Agreement”) on even date herewith with the
Beneficiary (the financing provided by the Beneficiary under the Bridge Loan
Agreement being the “Financing”); and
 
WHEREAS, the Company owns or holds those certain properties consisting of fee
lands, patented mining claims, unpatented mining claims, unpatented millsite
claims and other property interests located in Esmeralda County, Nevada along
with the buildings, structures and improvements thereon and certain equipment,
machinery and other assets located thereon or used in connection therewith
(collectively, the “Mineral Ridge Project”); and
 
WHEREAS, the Financing is and will be evidenced by the Bridge Loan Agreement,
certain collateral security documents and certain other agreements, documents or
instruments (collectively, as each of the foregoing may be amended, modified,
supplemented, restated or replaced, the “Transaction Documents”); and
 
WHEREAS, the Financing is secured by, among other things, a pledge by GPXM of
all of its ownership interest in and to the Company (the “Pledge”); and
 
 
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WHEREAS, as consideration for providing the Financing, GPXM is entering into an
option agreement (the “Option Agreement”) with the Beneficiary pursuant to which
the Beneficiary shall be provided an option to purchase the GPXM Interest; and
 
WHEREAS, the Beneficiary has requested GPXM to deliver this Consent, Waiver and
Subordination Agreement in respect of the Financing, the Pledge and the Option
Agreement; and
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to induce the Beneficiary to
enter into the Financing, the parties hereto hereby represent, warrant, covenant
and agree for the benefit of Beneficiary as follows:
 
1.           Representations of GPXM.  GPXM represents and warrants to
Beneficiary, as of the date hereof, that the following are true and correct:
 
(a)           Each of the recitals set forth above is true and correct.
 
(b)           A true, correct and complete copy of each of the Company
Agreements is attached hereto as Exhibit A, and, except as set forth in such
Exhibit, such Company Agreements have not been modified, amended, supplemented
or restated.
 
(c)           The entire agreement between GPXM and Scorpio US for the
governance, management, operation and administration of the Company is evidenced
by the Company Agreements.
 
(d)           The Company has the full and unfettered right to own, manage, use
and operate its properties and assets, including the Mineral Ridge Project.
 
(e)           The Company Agreements have been executed by the duly authorized
officers of GPXM and constitutes the valid and binding agreement of GPXM,
enforceable in accordance with its terms, and GPXM has full authority under all
federal, state and local laws and regulations to perform all of its obligations
under the Company Agreements.
 
(f)           The Company Agreements are in full force and effect and GPXM is
not in breach or default of any term or provision thereof.  None of GPXM or the
Company is in default in the performance of any of its respective obligations
under the Company Agreements.  All payments and fees required to be paid by the
Company to GPXM hereunder have been paid to the date hereof and GPXM does not
have any claim against the Company for indemnification as of the date hereof.
 
(g)           GPXM is duly organized, validly existing and in good standing
under the laws of Nevada and is qualified to do business in Nevada.  GPXM has
full power, authority and legal right (i) to own or lease its assets and
properties and to conduct its business as now being conducted and (ii) to enter
into this Agreement and each other agreement, document and instrument executed
or to be executed by it pursuant hereto or in connection herewith and to perform
the terms hereof and thereof as applicable to it.
 
 
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(h)           The execution and delivery by GPXM, and the performance of this
Agreement, have been duly authorized by all necessary action and do not and will
not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under or violation of, (iii) give any
third party any right to accelerate any obligation under, or (iv) require any
authorization, consent approval or other action by or notice to any court or
administrative or governmental body pursuant to (A) the constating documents of
GPXM, (B) the Company Agreements, (C) any law, statute or rule or (D) any
agreement, instrument, order, judgment or decrees to which GPXM or the Company
is subject or by which any of their respective properties are bound.
 
(i)           This Agreement is a legal, valid and binding obligation of each of
GPXM and the Company, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by general
principles of equity (whether enforcement is sought in equity or law).
 
2.           Representations of Scorpio US.  Scorpio US represents and warrants
to Beneficiary, as of the date hereof, that the following are true and correct:
 
(a)           To the best of its knowledge, each of the recitals set forth above
is true and correct;
 
(b)           A true, correct and complete copy of each of the Company
Agreements is attached hereto as Exhibit A, and, except as set forth in such
Exhibit, such Company Agreements have not been modified, amended, supplemented
or restated.
 
(c)           The entire agreement between GPXM and Scorpio US for the
governance, management, operation and administration of the Company is evidenced
by the Company Agreements.
 
(d)           The Company has the full and unfettered right to own, manage, use
and operate its properties and assets, including the Mineral Ridge Project.
 
(e)           The Company Agreements have been executed by the duly authorized
officers of Scorpio US and constitutes the valid and binding agreement of
Scorpio US, enforceable in accordance with its terms, and Scorpio US has full
authority under all federal, state and local laws and regulations to perform all
of its obligations under the Company Agreements.
 
(f)           The Company Agreements are in full force and effect and to the
best of its knowledge, no party thereto is in breach or default of any term or
provision thereof.  To the best of its knowledge, none of Scorpio US, GPXM or
the Company is in default in the performance of any of its respective
obligations under the Company Agreements.  Except for certain management fees
and payroll amounts reimbursable by the Company to Scorpio US in accordance with
the Company Agreements, all payments and fees required to be paid by the Company
to Scorpio US hereunder have been paid to the date hereof and neither Scorpio US
nor, to the best of its knowledge, GPXM has any claim against the Company for
indemnification as of the date hereof; provided that the Company shall continue
to pay the applicable management fees to Scorpio US and reimburse Scorpio US for
certain applicable payroll amounts for work conducted on behalf of the Company,
all in the amounts and in accordance with the Company Agreements.
 
 
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(g)           Scorpio US is duly organized, validly existing and in good
standing under the laws of Nevada and is qualified to do business in
Nevada.  Scorpio US has full power, authority and legal right (i) to own or
lease its assets and properties and to conduct its business as now being
conducted and (ii) to enter into this Agreement and each other agreement,
document and instrument executed or to be executed by it pursuant hereto or in
connection herewith and to perform the terms hereof and thereof as applicable to
it.
 
(h)           The execution and delivery by Scorpio US and the performance of
this Agreement, have been duly authorized by all necessary action and do not and
will not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under or violation of, (iii) give any
third party any right to accelerate any obligation under, or (iv) require any
authorization, consent approval or other action by or notice to any court or
administrative or governmental body pursuant to (A) the constating documents of
Scorpio US, (B) the Company Agreements, (C) any law, statute or rule or (D) any
agreement, instrument, order, judgment or decrees to which Scorpio US, or to the
best of its knowledge, the Company is subject or by which any of their
respective properties are bound.
 
(i)           This Agreement is a legal, valid and binding obligation of Scorpio
US, and, to the best of its knowledge, the Company, enforceable against each of
them in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (whether
enforcement is sought in equity or law).
 
3.           Consent and Waiver.
 
(a)           Scorpio US hereby acknowledges and consents to the Pledge by GPXM,
which is applicable to all of GPXM’s ownership of, and interest in, the Company,
including the grant by GPXM of a security interest in, on and to all of its
assets and properties, including the Company Agreements.
 
(b)           Scorpio US hereby consents to (i) GPXM entering into the Option
Agreement, (ii) any sale of the GPXM Interest by GPXM to Beneficiary that may
occur pursuant to the Option Agreement, and (iii) subject to the terms of
Article VII of the Operating Agreement, any subsequent sale of the GPXM Interest
that the Beneficiary may effect.  Scorpio US also hereby waives and agrees to
forego and forbear any and all pre-emptive rights and limits on transferability
(including those set forth in Article VII of the Operating Agreement and any
Exhibit thereto and in Article V of the Members’ Agreement and any Exhibit
thereto) with respect to any sale, transfer, assignment or conveyance of all or
any portion of GPXM’s interest in the Company to the Beneficiary under the
Option Agreement; provided that any subsequent sale of the GPXM Interest by the
Beneficiary to a third party will be subject to the terms of Article VII of the
Operating Agreement.  Scorpio US also hereby waives any of its rights under the
Company Agreements that would limit GPXM’s ability to enter into and perform its
obligations (to Beneficiary or otherwise) under the Option Agreement.  Scorpio
US also specifically acknowledges and agrees that any rights Scorpio US may
possess under the Company Agreements to purchase (or otherwise take ownership
of) the GPXM Interest (in whole or in part) are hereby waived, except with
respect to Section 4.2(b) of the Operating Agreement; provided that such waiver
shall not apply to any subsequent transfer of the GPXM Interest by the
Beneficiary to a third party.
 
 
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(c)           Scorpio US hereby waives its right of first refusal and any and
all other pre-emptive rights that it may have pursuant to the Company Agreements
with respect to that certain mineral property referred to as the Coyote Fault
property and claims constituting an extension thereof as described in Exhibit B
hereto, pursuant to option agreements entered into by and between GPXM and a
third party.
 
4.           Covenants and Agreements.  Notwithstanding the terms of the Company
Agreements, so long as the Bridge Loan Agreement and the Pledge or any portion
thereof, or the Option Agreement, continues in effect, GPXM and Scorpio US
hereby consent to and covenant and agree as follows:
 
(a)           No Amendment of Company Agreements.  None of GPXM, Scorpio US or
the Company will make or agree to any change, amendment, restatement,
supplement, modification, waiver or termination of all or any part of the
Company Agreements without first obtaining Beneficiary’s written consent, such
consent not to be unreasonably withheld, and no such change, amendment,
restatement, supplement, modification, waiver or termination that is made
without such written consent shall be effective as to Beneficiary.
 
(b)           Notice to Beneficiary and Right to Cure.
 
(i)           GPXM, Scorpio US and the Company each agrees to deliver to
Beneficiary a copy of any notice of termination, breach or default that exists,
arises or is delivered under the Company Agreements.

(ii)           If any member of the Company desires to terminate the Company
Agreements as a result of a breach or default thereunder, such member shall
first give Beneficiary at least sixty (60) days’ prior written notice of such
desire to terminate and the reasons therefor, which notice may be delivered to
Beneficiary simultaneously with the notice to any other applicable person.  In
the event Beneficiary (or the Company or any member thereof) shall cure such
breach or default within said sixty (60) day period, then any termination notice
related to such cause shall be null and void and of no further force or
effect.  Beneficiary has the right, but no obligation or responsibility, to take
any action, pay any amount or agree to perform any act or pay any amount in
connection herewith.

(iii)           GPXM, Scorpio US and the Company each agrees to deliver to
Beneficiary a copy of any capital call delivered to members of the Company and
to provide Beneficiary with notice of any failure of GPXM to contribute its
portion of any Program and Budget under the Operating Agreement and notice of
any other event that could lead to the dilution of the GPXM Interest.  Upon
receipt of a notice of a capital call, a notice of a GPXM failure to contribute
or notice of any other event that could lead to the dilution of the GPXM
Interest, Beneficiary shall have the right, exercisable during a period of
twenty (20) days from receipt of such notice, to cure such deficiency and to pay
such capital call, contribution or other amount in order to maintain the GPXM
Interest.  Beneficiary has the right, but no obligation or responsibility, to
take any action, pay any amount or agree to perform any act or pay any amount in
connection herewith.

 
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(c)           Subordination.  The Company Agreements do not create an interest
in real property.  Notwithstanding any liens, encumbrances or rights granted to
GPXM or Scorpio US as a member of the Company or any other provision of the
Company Agreements to the contrary, GPXM and Scorpio US agree and covenant
that  the Company Agreements and any and all liens, rights and interests
(whether choate or inchoate and including, without limitation, all rights to
payment of fees and other amounts and all mechanic’s and materialmen’s liens
under applicable law) owed to or claimed by either GPXM or Scorpio US or any
lien or security interest GPXM or Scorpio US may have in each other’s ownership
interest in the Company, are and shall be in all respects subordinate and
inferior in all respects to: (i) Beneficiary’s right to the prior, indefeasible
payment in full of the Bridge Loan Agreement and the other Transaction
Documents, and (ii) the liens, security interests and encumbrances created or to
be created for the benefit of Beneficiary and securing the repayment and
performance of the Bridge Loan Agreement and the Transaction Documents,
including, without limitation, those created under the Pledge, and all renewals,
extensions,
increases,  supplements,  amendments,  modifications  and  replacements  thereof.  GPXM
and Scorpio US agree and declare that at all times, whether before, after or
during the pendency of any bankruptcy, reorganization, insolvency or other
similar proceeding, and notwithstanding the order, sequence or date of the
filing of any financing statement or obtaining of possession, and whether or not
perfected or unavoidable, the Beneficiary’s security interests created under the
Transaction Documents shall constitute and be a senior and superior security
interest, lien and charge in and upon the GPXM Interest and prior in right to
any interest of GPXM or Scorpio US in GPXM’s ownership interest in the Company
howsoever arising.  Scorpio US agrees that it will not at any time contest the
validity, perfection, priority or enforceability of any Transaction Documents or
the liens, security interests and encumbrances of Beneficiary created thereby.
 
(d)           Beneficiary’s Right to Enforce its Remedies.
 
(i)           After the occurrence and during the continuance of an Event of
Default under any Transaction Document (as any such Event of Default is defined
therein), each of GPXM and Scorpio US shall, at the request of Beneficiary,
continue performance, on behalf of Beneficiary, of all of its obligations under
the terms of the Company Agreements.

(ii)  Notwithstanding anything to the contrary in the Company Agreements
(A)  after the occurrence and during the continuance of an Event of Default,
Beneficiary shall have and may exercise all rights and remedies as set forth in
the Pledge and each other Transaction Document pursuant to the terms thereof;
and (B) after the occurrence and during the continuance of any Event of Default,
Beneficiary shall have the right, subject to the terms and conditions of Article
VII of the Operating Agreement, to sell, transfer, assign and convey the
ownership interest of GPXM in and to the Company, and agrees that following a
transfer in accordance with the terms and conditions of Article VII, such
transferee shall thereupon become a member of the Company and have all rights,
remedies and obligations thereunder, and each of Scorpio US and such transferee
shall fully and completely recognize each other as members of the Company and
parties to the Company Agreements.
 
 
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(iii)           Notwithstanding anything in the Company Agreements to the
contrary, and subject to the other terms and conditions of this Agreement, in
the event that (A) Beneficiary (or its successors or assigns) becomes a member
of the Company, through foreclosure, conveyance in lieu of foreclosure, pursuant
to the Option Agreement or otherwise, and (B) the Company Agreements are then in
full force and effect, then, (1) without the execution of any further
instrument, Scorpio US and Beneficiary (or its successors or assigns) shall
fully and completely recognize each other as parties to and full members under
the Company Agreements and shall thereafter be bound by all of the terms and
conditions therein provided, so as to establish direct privity of contract
between Scorpio US and Beneficiary (or its successors or assigns); and (2) the
Company shall amend the Schedule of Members (as defined in the Operating
Agreement) and accounting records of the Company to reflect the new member,
distribute such amended Schedule of Members to all members of the Company, and
otherwise treat such new member as a full legal and beneficial member of the
Company with all rights and obligations of a member thereof.  The provisions of
this clause shall be effective and self-operative whether or not any further
instrument is executed.

(iv)           GPXM and Scorpio US agree that: (A) the exercise by the
Beneficiary of any right or remedy under a Transaction Document does not of
itself constitute a default under or breach of the Company Agreements; (B) the
exercise by Beneficiary of a right or remedy under a Transaction Document does
not of itself excuse or otherwise relieve GPXM, Scorpio US or the Company from
duly performing its obligations under the Company Agreements; (C) if Beneficiary
exercises a right or remedy under a Transaction Document in respect of, or which
otherwise affects or implicates, the Company Agreements, then, so long as
Beneficiary agrees to comply with the terms and conditions of the Company
Agreements, GPXM, Scorpio US and the Company must recognize and deal with
Beneficiary under the Company Agreements in the same manner; and (D) Beneficiary
will not be liable for, or be taken to have assumed liability for, any
obligation of GPXM or the Company under the Company Agreements by reason only of
the exercise of any right or remedy or the performance of any obligation under
the Company Agreements or any Transaction Document.

(v)           Nothing contained in this Section 4(d) shall prevent any party
from declaring a default under the Company Agreements in accordance with its
terms by reason of nonperformance or nonpayment when due of any fees or other
payments due and owing under the terms of the Company Agreements, subject in
each case to the terms of Section 4(b) hereof.

(e)           Further Assurances.  Each of GPXM and Scorpio US further agrees
to: (i) furnish Beneficiary upon request with copies of such information as each
is entitled to receive under the Company Agreements; (ii) cooperate with
Beneficiary and its employees, agents and representatives in any inspection of
all or any portion of the Company or the Mineral Ridge Project; and (iii)
execute, acknowledge and deliver all and any such other and further instrument,
certificate and document and do and perform such other acts as in the opinion of
Beneficiary may be necessary or desirable to implement, effect and maintain the
intent of this Agreement, the Transaction Documents and the Option Agreement
upon the reasonable request of Beneficiary and at the Company’s expense.
 
 
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(f)           Beneficiary Not Obligated Under Company Agreements.  In no event
shall Beneficiary be (i) liable for any action or omission of GPXM, the Company
or Scorpio US, (ii) bound by any amendment or modification of the Company
Agreements made without Beneficiary’s prior written consent, or (iii) subject to
any counterclaim or claims which any party might assert or is entitled to assert
against the Company.  Beneficiary has the right, but no obligation or
responsibility, to take any action, pay any amount or agree to perform any act
or pay any amount in connection herewith.  Any action, payment or performance
made by Beneficiary prior to becoming a member of the Company shall not obligate
Beneficiary to take any other or further action or make any other or further
payment or performance.  Nothing contained in this Agreement shall be deemed a
waiver or release by GPXM or Scorpio US of any rights or remedies either of them
may have against the Company under the Company Agreements.
 
(g)           No Joint Venture.  Beneficiary has no obligation to Scorpio US
with respect to the Bridge Loan Agreement or any other Transaction Document, and
Scorpio US  is not a third party beneficiary of any Transaction Document or with
respect to any of Beneficiary’s obligations set forth in any Transaction
Document.  The relationship of Beneficiary to GPXM is one of a creditor to a
debtor, and Beneficiary is not a joint venturer or partner of GPXM.
 
(h)           Beneficiary’s Reliance on Representations.  Each of GPXM and
Scorpio US has executed and delivered this Agreement with full knowledge that
Beneficiary shall rely upon the representations, warranties, covenants and
agreements herein contained.
 
(i)           Successors and Assigns.  Each of GPXM, Scorpio US and the Company
understands that Beneficiary may assign this Agreement, the Bridge Loan
Agreement and the other Transaction Documents upon written notice to GPXM,
Scorpio US and the Company.  Each of GPXM, Scorpio US and the Company agrees
that this Agreement and the obligations of each party hereunder shall be binding
upon it and its successors and assigns and shall inure to the benefit of
Beneficiary and its successors and assigns, including, without limitation, any
parties to whom Beneficiary’s interest in the Bridge Loan Agreement and the
Pledge is assigned.  Each of GPXM and Scorpio US further agrees that this
Agreement and the obligations herein shall transfer and apply to any successor
or assign, including any successor and assign of the ownership or control of its
Ownership Interest (as defined in the Operating Agreement); in furtherance of
the foregoing, each of GPXM and Scorpio further agrees that it will not sell,
transfer, assign or convey its Ownership Interest (as defined in the Operating
Agreement) without first causing such transferee or assignee of such interest to
assume this Agreement and agree in writing to be bound by the terms
hereof.  Notwithstanding anything else contained in this paragraph, any
assignment by Beneficiary of this Agreement, the Loan Agreement or the other
Transaction Documents that would have the effect of transferring the GPXM
Interest to a third party, other than an assignment by Beneficiary to an
affiliate of Beneficiary (an “Affiliate Transferee”), will be subject to the
terms of Article VII of the Operating Agreement, or must otherwise receive the
prior written consent of Scorpio US, which consent may be withheld at Scorpio
US’s sole discretion; provided that if Beneficiary assigns this Agreement, the
Loan Agreement or the other Transaction Documents to an Affiliate Transferee,
and subsequently the Affiliate Transferee is involved in a transaction which
causes the Affiliate Transferee to no longer be an affiliate of the Beneficiary
and also has the effect of transferring the GPXM Interest to a third party, then
such transaction will be deemed to be a transfer of a membership interest that
is subject to the terms of Article VII of the Operating Agreement.
 
 
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(j)           Agreement by the Company.  The Company agrees to be bound by the
terms of this Agreement, to observe the lien priorities and the payment
priorities set forth herein and to otherwise take all appropriate action and
conduct its affairs consistent with the terms hereof.
 
(k)           Agreement to Additional Consent.  GPXM, Scorpio US and the Company
agree to execute and deliver an additional Consent, Waiver and Subordination,
substantially in the form of this Agreement, upon GPXM and Beneficiary entering
into a gold stream debt facility agreement or other similar, subsequent
financing (the “Gold Stream Financing”), the terms and conditions of which Gold
Stream Financing shall be substantially similar to the Amended and Restated
Senior Secured Note dated May 19, 2011 between the Beneficiary and Scorpio Gold
Corporation; provided, that if the form of Pledge or Option Agreement, or
amendments or confirmations thereof, entered into in connection with the Gold
Stream Financing contain terms and conditions materially different from the
Pledge and Option Agreement consented to hereby, then such Consent, Waiver and
Subordination shall be on terms acceptable to Scorpio US, acting reasonably.
 
5.           Continuing Agreement and Termination.
 
(a)           This Agreement is a continuing, irrevocable Agreement and shall
remain in full force and effect and shall be irrevocable until all of the
indebtedness, liabilities and/or obligations under or in connection with any
Transaction Document have been fully, completely and irrevocably paid in full
and the Bridge Loan Agreement and the Pledge and the other Transaction Documents
are terminated and released.
 
(b)           This Agreement shall continue to be effective regardless of the
solvency or insolvency of the Company, the liquidation or dissolution of the
Company, the institution by or against the Company of any proceeding under any
bankruptcy, insolvency or other similar law, the appointment of a receiver or
trustee for the Company or any of its property, any reorganization, merger,
consolidation or amalgamation of the Company, or any change in the ownership,
membership, management, composition or nature of the Company.
 
6.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA.
 
7.           Counterparts.  This Agreement may be executed in any number of
original counterparts, and may be executed by facsimile, portable document
format (.pdf), tif or other electronic delivery, each of which shall be deemed
an original, but all of which when taken together shall constitute one and the
same instrument.
 
8.           Notices.  Any notice required or permitted to be given under this
Agreement shall be in writing and either shall be mailed by certified mail,
postage prepaid, return receipt requested, or sent by overnight air courier
service, or personally delivered to a representative of the receiving party, or
sent by telecopy (provided an identical notice is also sent simultaneously by
mail, overnight air courier, or personal delivery as otherwise provided in this
Section 7).  All such communications shall be mailed, sent or delivered,
addressed to the party for whom it is intended at its address set forth below.
 

 
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If to GPXM:

Golden Phoenix Minerals, Inc.
1675 E. Prater Way, Suite 102
Sparks, Nevada  89434
Attention:  Tom Klein, CEO
Facsimile:  (775) 853-5010

If to the Company:

c/o Scorpio Gold Corporation
995 Rue Germain
Val-d’Or, Quebec
Canada J9P 7H7
Attention:  President and Chief Executive Officer
Facsimile:  (819) 825-0977

If to Scorpio US:

c/o Scorpio Gold Corporation
995 Rue Germain
Val-d’Or, Quebec
Canada J9P 7H7
Attention:  President and Chief Executive Officer
Facsimile:  (819) 825-0977

If to Beneficiary:
 
Waterton Global Value, L.P.
c/o Waterton Global Resources Management, Inc.
199 Bay Street
Toronto, Ontario
Canada M5L 1E2
Attention:  Richard J. Wells, Vice President Finance
Facsimile:  (416) 504-3200

 
Any communication so addressed and mailed or sent shall be deemed to be given
when actually received or on the date on which delivery is tendered but receipt
is declined, in each case to the address of the intended addressee.  If given by
facsimile, a notice shall be deemed given and received when the facsimile is
transmitted to the party’s facsimile number specified above, and confirmation of
complete receipt is received by the transmitting party during the recipient’s
normal business hours or on the next business day if not confirmed during the
recipient’s normal business hours, and an identical notice is also sent
simultaneously by mail, overnight air courier, or personal delivery as otherwise
provided in this Section 8.  Any party may designate a change of address by
giving to the other parties at least ten (10) days’ prior written notice of such
change of address.
 
 
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 9.           Successors.  This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of the parties.
 
10.           Survival of Representations and Warranties.  All representations
and warranties made hereunder shall survive the execution and delivery of this
Agreement.
 
11.           Unenforceable or Inapplicable Provisions.  If any provision hereof
is invalid or unenforceable in any jurisdiction, whether with respect to all
parties hereto or with respect to less than all of such parties, the other
provisions hereof and of the written instruments will remain in full force and
effect in that jurisdiction with respect to the parties as to which such
provision is valid and enforceable, and the remaining provisions hereof will be
liberally construed in favor of Beneficiary in order to carry out the provisions
hereof.  The invalidity of any provision of this instrument in any jurisdiction
will not affect the validity or enforceability of any provision in any other
jurisdiction.
 
12.           Rights Cumulative.  Each and every right, power and remedy given
to Beneficiary herein or in any other Transaction Document will be cumulative
and not exclusive; and each and every right, power and remedy whether
specifically given herein or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by Beneficiary,
and the exercise, or the beginning of the exercise, of any such right, power or
remedy will not be deemed a waiver of the right to exercise, at the same time or
thereafter, any other right, power or remedy.  A waiver by Beneficiary of any
right or remedy hereunder or under applicable law on any occasion will not be a
bar to the exercise of any right or remedy on any subsequent occasion.
 
13.           Non-Waiver.  No act, delay, omission or course of dealing by
Beneficiary will be a waiver of any of Beneficiary’s rights or remedies
hereunder or under applicable law.  No waiver, change, amendment or modification
in whole or in part of this instrument or any other written instrument will be
effective unless in a writing signed by Beneficiary.
 

 
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-11-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each party hereto has caused this Consent, Waiver and
Subordination to be duly executed and delivered by its duly authorized
representatives, as of the day and year first above written.
 

   
GPXM:
         
GOLDEN PHOENIX MINERALS, INC.
   
a Nevada Corporation
 
By:
__________________________________
 
Name:
___________________________
 
Title:
___________________________
         
SCORPIO US:
         
SCORPIO GOLD (US) CORPORATION
   
a Nevada Corporation
 
By:
__________________________________
 
Name
 ___________________________
 
Title:
___________________________
       
:
COMPANY
         
MINERAL RIDGE GOLD, LLC
   
a Nevada limited liability company
 
By:
__________________________________
 
Name:
___________________________
 
Title:
___________________________
       
:
BENEFICIARY
         
WATERTON GLOBAL VALUE, L.P., by the General Partner of its General Partner,
CORTLEIGH LIMITED
  By:     __________________________________   Name:
___________________________
  Title:    
___________________________
     

       

 
(signature page to Consent, Waiver and Subordination)

 
 
-12-

--------------------------------------------------------------------------------

 

Exhibit A

Operating Agreement

and

Members’ Agreement

[see attached]

 
-13-

--------------------------------------------------------------------------------

 

Exhibit B

Description of Claims Constituting Coyote Fault and Coyote Extension

Admin State: NV
Admin State: NV
   
  Geo State: NV
  Geo State: NV
   
SILVER SPARTAN LLC
DOCKWEILER PAUL
           
LAS VEGAS, NV 89123-5857
LAS VEGAS, NV 89123-5857
           
Serial No
Claim Name/Number
Mc Lead Case Ser Nr
Holder
NMC1042950
SP 1
NMC1042950
Silver Spartan LLC
NMC1042951
SP 2
NMC1042950
Silver Spartan LLC
NMC1042952
SP 3
NMC1042950
Silver Spartan LLC
NMC1042953
SP 4
NMC1042950
Silver Spartan LLC
NMC1042954
SP 5
NMC1042950
Silver Spartan LLC
NMC1042955
SP 6
NMC1042950
Silver Spartan LLC
NMC1042956
SP 8
NMC1042950
Silver Spartan LLC
NMC1042957
SP 9
NMC1042950
Silver Spartan LLC
NMC1042958
SP 13
NMC1042950
Silver Spartan LLC
NMC1042959
SP 14
NMC1042950
Silver Spartan LLC
NMC1042960
SP 17
NMC1042950
Silver Spartan LLC
NMC1042961
SP 18
NMC1042950
Silver Spartan LLC
NMC1042962
SP 19
NMC1042950
Silver Spartan LLC
NMC1042963
SP 20
NMC1042950
Silver Spartan LLC
NMC1042964
SP 21
NMC1042950
Silver Spartan LLC
NMC1042965
SP 22
NMC1042950
Silver Spartan LLC
NMC1042966
SP 23
NMC1042950
Silver Spartan LLC
NMC1042967
SP 24
NMC1042950
Silver Spartan LLC
NMC1042968
SP 25
NMC1042950
Silver Spartan LLC
NMC1042969
SP 26
NMC1042950
Silver Spartan LLC
NMC1042970
SP 27
NMC1042950
Silver Spartan LLC
NMC1042971
SP 28
NMC1042950
Silver Spartan LLC
NMC1042972
SP 29
NMC1042950
Silver Spartan LLC
NMC1042973
SP 30
NMC1042950
Silver Spartan LLC
NMC1042974
SP 31
NMC1042950
Silver Spartan LLC
NMC1042975
SP 32
NMC1042950
Silver Spartan LLC
NMC1042976
SP 33
NMC1042950
Silver Spartan LLC
NMC1042977
SP- 42
NMC1042950
Silver Spartan LLC
NMC1042978
SP- 43
NMC1042950
Silver Spartan LLC
NMC1042979
SP- 44
NMC1042950
Silver Spartan LLC
NMC1042980
SP- 45
NMC1042950
Silver Spartan LLC
NMC1042981
SP- 46
NMC1042950
Silver Spartan LLC
NMC1042982
SP- 50
NMC1042950
Silver Spartan LLC
NMC1042983
SP- 53
NMC1042950
Silver Spartan LLC
NMC1042984
SP- 54
NMC1042950
Silver Spartan LLC
NMC1042985
SP- 55
NMC1042950
Silver Spartan LLC
NMC1042986
SP- 56
NMC1042950
Silver Spartan LLC
NMC1042987
SP- 57
NMC1042950
Silver Spartan LLC
NMC1042988
SP- 58
NMC1042950
Silver Spartan LLC
NMC1042989
SP- 59
NMC1042950
Silver Spartan LLC
NMC1042990
SP 60
NMC1042950
Silver Spartan LLC
NMC1042991
SP 61
NMC1042950
Silver Spartan LLC
NMC1042992
SP 62
NMC1042950
Silver Spartan LLC
NMC1042993
SP 63
NMC1042950
Silver Spartan LLC
NMC1042994
SP 64
NMC1042950
Silver Spartan LLC
NMC1042995
SP 65
NMC1042950
Silver Spartan LLC
NMC1042996
SP- 66
NMC1042950
Silver Spartan LLC
NMC1042997
SP- 67
NMC1042950
Silver Spartan LLC
NMC1042998
SP- 68
NMC1042950
Silver Spartan LLC
NMC1042999
SP- 69
NMC1042950
Silver Spartan LLC
NMC1043000
SP 70
NMC1042950
Silver Spartan LLC
NMC1043001
SP 71
NMC1042950
Silver Spartan LLC
NMC1043002
SP- 72
NMC1042950
Silver Spartan LLC
NMC1043003
SP- 73
NMC1042950
Silver Spartan LLC
NMC1043004
SP- 74
NMC1042950
Silver Spartan LLC
NMC1043005
SP- 76
NMC1042950
Silver Spartan LLC
NMC1043006
SP- 81
NMC1042950
Silver Spartan LLC
NMC1043007
SP- 82
NMC1042950
Silver Spartan LLC
NMC1043008
SP- 83
NMC1042950
Silver Spartan LLC
NMC1043009
SP- 84
NMC1042950
Silver Spartan LLC
NMC1043010
SP- 109
NMC1042950
Silver Spartan LLC
NMC1043011
SP- 110
NMC1042950
Silver Spartan LLC
NMC1043012
SP- 125
NMC1042950
Silver Spartan LLC
NMC1043013
SP- 126
NMC1042950
Silver Spartan LLC
NMC1043014
SP- 127
NMC1042950
Silver Spartan LLC
NMC1043015
SP- 128
NMC1042950
Silver Spartan LLC
NMC1043016
SP- 129
NMC1042950
Silver Spartan LLC
NMC1043017
SP- 130
NMC1042950
Silver Spartan LLC
NMC1043018
SP- 131
NMC1042950
Silver Spartan LLC
NMC1043019
SP- 132
NMC1042950
Silver Spartan LLC
NMC1043020
SP- 133
NMC1042950
Silver Spartan LLC
NMC1043021
SP- 134
NMC1042950
Silver Spartan LLC
NMC1008314
CF 15
NMC1008314
Paul Dockweiler
NMC1008315
CF 16
NMC1008314
Paul Dockweiler
NMC1008316
CF 17
NMC1008314
Paul Dockweiler
NMC1008317
CF 18
NMC1008314
Paul Dockweiler
NMC1008318
CF 19
NMC1008314
Paul Dockweiler
NMC1008319
CF 20
NMC1008314
Paul Dockweiler
NMC1008320
CF 21
NMC1008314
Paul Dockweiler
NMC1008321
CF 22
NMC1008314
Paul Dockweiler
NMC1008322
CF 23
NMC1008314
Paul Dockweiler
NMC1008323
CF 24
NMC1008314
Paul Dockweiler
NMC1008324
CF 25
NMC1008314
Paul Dockweiler
NMC1008325
CF 26
NMC1008314
Paul Dockweiler
NMC1008326
CF 27
NMC1008314
Paul Dockweiler
NMC1008327
CF 28
NMC1008314
Paul Dockweiler
NMC1008328
CF 33
NMC1008314
Paul Dockweiler
NMC1008329
CF 34
NMC1008314
Paul Dockweiler
NMC1008330
CF 35
NMC1008314
Paul Dockweiler
NMC1008331
CF 36
NMC1008314
Paul Dockweiler
NMC1008332
CF 37
NMC1008314
Paul Dockweiler
NMC1008333
CF 38
NMC1008314
Paul Dockweiler
NMC1008334
CF 39
NMC1008314
Paul Dockweiler
NMC1008335
CF 40
NMC1008314
Paul Dockweiler
NMC1008336
CF 41
NMC1008314
Paul Dockweiler
NMC1008337
CF 42
NMC1008314
Paul Dockweiler
NMC996970
CF #1
NMC996970
Paul Dockweiler
NMC996971
CF #2
NMC996970
Paul Dockweiler
NMC996972
CF #3
NMC996970
Paul Dockweiler
NMC996973
CF #4
NMC996970
Paul Dockweiler
NMC996974
CF #5
NMC996970
Paul Dockweiler
NMC996975
CF #6
NMC996970
Paul Dockweiler
NMC996976
CF #7
NMC996970
Paul Dockweiler
NMC996977
CF #8
NMC996970
Paul Dockweiler
NMC996978
CF #9
NMC996970
Paul Dockweiler
NMC996979
CF #10
NMC996970
Paul Dockweiler
NMC996980
CF #11
NMC996970
Paul Dockweiler
NMC996981
CF #12
NMC996970
Paul Dockweiler
NMC996982
CF #13
NMC996970
Paul Dockweiler
NMC996983
CF #14
NMC996970
Paul Dockweiler

 
-14-

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