TERMINATION
      AGREEMENT

    


    TERMINATION
      AGREEMENT
      (the
“Agreement”), dated as of January 19, 2006, by and between GOLDEN
      PHOENIX MINERALS, INC.,
      a
      Minnesota corporation, (the “Company”), and FUSION
      CAPITAL FUND II, LLC, an
      Illinois limited liability company (the “Buyer”).

    


    WHEREAS,
      the
      Buyer and the Company mutually desire to terminate the Common Stock Purchase
      Agreement dated as of July 13, 2005, by and between the Company and the Buyer
      (the “Purchase Agreement”) and the agreements entered into in connection with
      the Purchase Agreement. All capitalized terms used in this Agreement that are
      not defined in this Agreement shall have the meanings set forth in the Purchase
      Agreement.

    


    NOW
      THEREFORE,
      the
      Company and the Buyer hereby agree as follows:

    


    1. TERMINATION
      OF THE PURCHASE AGREEMENT. 

    


    The
      Purchase Agreement, and the other Transaction Documents between the Buyer and
      the Company related to the Purchase Agreement (other than this Agreement) are
      hereby terminated effective as of the date hereof and any and all rights, duties
      and obligations arising thereunder or in connection with the Purchase Agreement,
      and the Transaction Documents are now and hereafter fully and finally
      terminated, provided, however, that (i) the representations and warranties
      of
      the Buyer and Company contained in Sections 2 and 3 of the Purchase Agreement,
      (ii) the indemnification provisions set forth in Section 8 of the Purchase
      Agreement, and (iii) the agreements and covenants set forth in Section 11 of
      the
      Purchase Agreement shall survive such termination and shall continue in full
      force and effect (the “Surviving Obligations”).


    


    2. MISCELLANEOUS.

    


    (a) Governing
      Law; Jurisdiction; Jury Trial.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by the internal laws of the State of
      Illinois, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of Illinois or any other jurisdictions)
      that would cause the application of the laws of any jurisdictions other than
      the
      State of Illinois. Each party hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in the City of Chicago,
      for
      the adjudication of any dispute hereunder or under the other Transaction
      Documents or in connection herewith or therewith, or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any suit, action or proceeding, any claim that it is
      not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof to such party at the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law. EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
      CONTEMPLATED HEREBY.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

    


    (c) Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

    


    (d) Severability.
      If any
      provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

    


    (e) Notices.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Trading Day after deposit with a nationally recognized overnight
      delivery service, in each case properly addressed to the party to receive the
      same. The addresses and facsimile numbers for such communications shall
      be:

    


    If
      to the
      Company:

    Golden
      Phoenix Minerals, Inc.

    1675
      E.
      Prater Way, Suite 102

    Sparks,
      Nevada 89434

    Telephone: 775-853-4919

    Facsimile: 775-853-5010

    Attention:
       

    


    


    If
      to the
      Buyer:

    Fusion
      Capital Fund II, LLC

    222
      Merchandise Mart Plaza, Suite 9-112

    Chicago,
      IL 60654

    Telephone: 312-644-6644

    Facsimile: 312-644-6244

    Attention: Steven
      G.
      Martin

    


    or
      at
      such other address and/or facsimile number and/or to the attention of such
      other
      person as the recipient party has specified by written notice given to each
      other party three (3) Trading Days prior to the effectiveness of such change.
      Written confirmation of receipt (A) given by the recipient of such notice,
      consent, waiver or other communication, (B) mechanically or electronically
      generated by the sender's facsimile machine containing the time, date, and
      recipient facsimile number or (C) provided by a nationally recognized overnight
      delivery service, shall be rebuttable evidence of personal service, receipt
      by
      facsimile or receipt from a nationally recognized overnight delivery service
      in
      accordance with clause (i), (ii) or (iii) above, respectively.

    


    (f) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns. The Company shall not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Buyer, including by merger or consolidation. The Buyer may not
      assign its rights or obligations under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (g) No
      Third Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

    


    (h) Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement.

    


    (i) No
      Strict Construction.
      The
      language used in this Agreement is the language chosen by the parties to express
      their mutual intent, and no rules of strict construction will be applied against
      any party.

    


    (j) Changes
      to the Terms of this Agreement.
      This
      Agreement and any provision hereof may only be amended by an instrument in
      writing signed by the Company and the Buyer. The term "Agreement" and all
      reference thereto, as used throughout this instrument, shall mean this
      instrument as originally executed, or if later amended or supplemented, then
      as
      so amended or supplemented.

    


    (k) Failure
      or Indulgence Not Waiver.
      No
      failure or delay in the exercise of any power, right or privilege hereunder
      shall operate as a waiver thereof, nor shall any single or partial exercise
      of
      any such power, right or privilege preclude other or further exercise thereof
      or
      of any other right, power or privilege.


    


    *
      * *



    


    IN
      WITNESS WHEREOF,
      the
      Buyer and the Company have caused this Termination Agreement to be duly executed
      as of the date first written above.

     

    
      	 	 	THE
              COMPANY:
	 	 	 
	 	 	GOLDEN PHOENIX MINERALS,
              INC.
	 	 	 
	 	 	By: /s/ Kenneth S. Ripley
	 	 	Name: Kenneth S. Ripley 
	 	 	Title: Interim Chief
              Executive
              Officer
	 	 	 
	 	 	BUYER:
	 	 	 
	 	 	FUSION CAPITAL FUND II,
              LLC
	 	 	BY: FUSION CAPITAL PARTNERS,
              LLC
	 	 	BY: SGM HOLDINGS
              CORP.
	 	 	 
	 	 	By: /s/ Steven G. Martin
	 	 	Name:  Steven
              G. Martin
	 	 	Title:    President