<PAGE>
                                                                    EXHIBIT 10.5

                               PURCHASE AGREEMENT


         This Purchase Agreement ("Agreement") dated as of January 10, 2005, is
made


Among

SELLER:        GOLDEN PHOENIX MINERALS, INC., a Minnesota corporation with an
               address of 1675 East Paater Way, Suite 102, Sparks, Nevada 89434,
               ("Golden Phoenix")

And

BUYER:         BOREALIS MINING COMPANY, a Nevada corporation with an address of
               1153 Bergen Parkway, Suite M290, Evergreen, Colorado 80439-9773
               ("Borealis Mining")

And

GUARANTOR:     GRYPHON GOLD CORPORATION, a Nevada corporation with an address of
               1153 Bergen Parkway, Suite M290, Evergreen, Colorado 80439-9773
               ("Gryphon Gold")

PROPERTY:      The property described on Exhibit A to this Agreement, including
               all claims, accruements and improvements thereon and all rights,
               privileges and interests appurtenant thereto (the "Property").

                                    RECITALS

         A.       Golden Phoenix and Borealis Mining own interests in the
Property; and

         C.       Golden Phoenix agrees to sell and assign its rights,
privileges and interests in the Property to Borealis Mining on the terms set
forth herein and Borealis Mining agrees to purchase and accept such rights,
privileges and interests on the terms set forth herein.

                            AGREEMENT OF THE PARTIES

         In consideration of the mutual promises and covenants set forth in this
Agreement, Golden Phoenix agrees to sell and assign and Borealis Mining agrees
to purchase and accept Golden Phoenix's rights, privileges and interests in the
Property on the terms and conditions set forth in this Agreement.

                                   ARTICLE 1

                                  DEFINITIONS

         1.1      "Due Diligence Report" shall mean a legal report of UCC
claims, liens and legal notices of record prepared by Snell & Wilmer LLP.

<PAGE>

         1.2      "Earn-In Agreement" shall mean the Earn-In Agreement dated
July 21, 2003, by and between Golden Phoenix and Borealis Mining, including all
exhibits attached thereto and incorporated therein described in Exhibit A-3
hereto.

         1.3      "Escrow Agent" shall mean LandAmerica Lawyers Title of Arizona
located at One S. Church Avenue, Suite 1800, Tucson, Arizona.

         1.4      "Mining Lease" shall mean that certain Mining Lease dated
January 24, 1997, by and between Richard J. Cavell TTTEE F/T Richard J. Cavell
Trust dated 02/23/1994, Hardrock Mining Company, a Nevada corporation, and John
W. Whitney, as Lessors, and J.D. Welsh & Associates, Inc., a Nevada corporation,
as lessee, memorandum of which is recorded as Entry 115828 in Book 169 at page
489 in the official records of Mineral County, Nevada.

         1.5      "Property" shall mean the property described on Exhibit A to
this Agreement, including all claims, accruements and improvements thereon and
all rights, privileges and interests appurtenant thereto.

         1.6      "Title Abstract" shall mean the title abstract prepared by a
professional title company of recorded documents of record in Mineral County,
Nevada relating to Golden Phoenix and J.D. Welsh & Associates, Inc., a Nevada
corporation.

         1.7      "Title Report" shall mean the title reports prepared by Parr
Waddoups dated October 28, 2004, and updated by Roger Gash, a Certified
Professional Landman and Nevada Commissioned Abstractor, of unpatented mining
claims and unpatented millsite claims that are subject to the Mining Lease.

                                   ARTICLE 2

                                SALE AND ASSIGN

         2.1      AGREEMENT TO SELL AND ASSIGN. At the Closing, subject to the
terms and conditions of this Agreement, Golden Phoenix will sell and assign and
Borealis Mining will purchase and accept all of Golden Phoenix's rights,
privileges and interests in and to the Property with effect from the Closing
Date.

         2.2      PURCHASE PRICE. The purchase price for Golden Phoenix's
rights, privileges and interests in the Property shall be the sum of $1,400,000
(the "Purchase Price").

         2.3      PAYMENT SCHEDULE. The Purchase Price shall be payable to
Golden Phoenix as follows:

         (a)      $400,000.00 paid at Closing;

         (b)      $250,000.00 payable 91 days following the Closing Date;

         (c)      $250,000.00 payable 182 days following the Closing Date;

         (d)      $250,000.00 payable 273 days following the Closing Date; and


                                     - 2 -

<PAGE>

         (e)      $250,000.00 payable 364 days following the Closing Date.

         2.4      PREPAYMENT. All or any portion of the Purchase Price may be
paid prior to the time provided in Section 2.3.

         2.5      SECURITY. All obligations of Borealis Mining owing to Golden
Phoenix as provided herein shall be secured by Gryphon Gold's pledge in escrow
of 150,000 shares of voting common stock of Borealis Mining which represents
fifteen percent (15%) of the issued and outstanding voting common stock of
Borealis Mining (the "Pledged Stock"). Furthermore, Gryphon Gold covenants to
guarantee the obligations of Borealis Mining set forth in this Article 2.

         2.6      RELEASE OF SECURITY. The Escrow Agent shall release to Gryphon
Gold from escrow fifteen (15) shares of the Pledged Stock for every $100.00 of
the Purchase Price paid by Borealis Mining in excess of the initial $400,000.00
of the Purchase Price paid at Closing.

                                   ARTICLE 3

                                    CLOSING

         3.1      CLOSING. The closing of the transactions contemplated herein
(the "Closing") shall take place at 10:00 a.m. on or before January 14, 2005
(the "Closing Date"), at the Tucson offices of Snell & Wilmer LLP or such other
place as may be agreed in writing by Golden Phoenix and Borealis Mining.

         3.2      CONDITION PRECEDENT IN FAVOR OF BOREALIS MINING. The
obligations of Borealis Mining under this Agreement shall be subject to the
receipt, review and satisfaction of the following reports or the waiver by
Borealis Mining, of the following conditions precedent to the Closing, each of
which is for the exclusive benefit of Borealis Mining and may be waived by
Borealis Mining at any time, in whole or in part, in its sole discretion without
prejudice to any other rights that it may have:

         (a)      Due Diligence Report;

         (b)      Title Abstract; and

         (c)      Title Report.

         3.3      OPTION TO ACCELERATE CLOSING. Borealis Mining has the option
to waive the condition precedent to closing as set forth in Section 3.2 and
accelerate the Closing Date.

         3.4      IRREVOCABLE DIRECTIONS. Upon execution of this Agreement by
Golden Phoenix and Borealis Mining the parties hereto covenant to deliver this
Agreement and all exhibits to the Escrow Agent and this Agreement shall
thereafter serve as irrevocable directions to the Escrow Agent to act in
accordance with the terms contained herein and the parties covenant to deliver
to the Escrow Agent those documents and instruments contained in this Article 3
herein and elsewhere as contemplated herein.


                                     - 3 -

<PAGE>

         3.5      GOLDEN PHOENIX'S CLOSING DELIVERIES. At the Closing, Golden
Phoenix shall deliver or cause to be delivered to Borealis Mining the following
documents, each duly executed where applicable:

         (a)      Certified copy of resolutions of the Directors of Golden
                  Phoenix authorizing the execution and delivery of this
                  Agreement, the sale and assignment of the Property and all
                  documents required to be executed by Golden Phoenix pursuant
                  hereto;

         (b)      Assignment of Borealis Mining Lease assigning Golden Phoenix's
                  right, title and interest in the Property to Borealis Mining
                  in the form attached hereto as Exhibit B;

         (c)      Consent to Assignment of Borealis Mining Lease consenting to
                  the assignment of Golden Phoenix's right, title and interest
                  in the Property to Borealis Mining in the form attached hereto
                  as Exhibit C;

         (d)      Assignment of Interest in Property assigning Golden Phoenix's
                  rights, privileges and interest in Property, as described by
                  the Assignment, to Borealis Mining in the form attached hereto
                  as Exhibit D; and

         (e)      All bills of sale, assurances, transfers, assignments,
                  consents, and such other agreements, documents and instruments
                  as may be reasonably required by Borealis Mining to complete
                  the transactions provided for in this Agreement.

         3.6      BOREALIS MINING CLOSING DELIVERIES. At the Closing, Borealis
Mining shall deliver or cause to be delivered to Golden Phoenix the following
documents, each duly executed where applicable:

         (a)      Certified copy of resolutions of the Directors of Borealis
                  Mining authorizing the execution and delivery of this
                  Agreement, the purchase and acceptance of the Property and all
                  documents required to be executed by Borealis Mining pursuant
                  hereto;

         (b)      Assignment of Borealis Mining Lease assigning Golden Phoenix's
                  right, title and interest in the Property to Borealis Mining
                  in the form attached hereto as Exhibit B;

         (c)      Consent to Assignment of Borealis Mining Lease consenting to
                  the assignment of Golden Phoenix's right, title and interest
                  in the Property to Borealis Mining in the form attached hereto
                  as Exhibit C; and

         (d)      Assignment of Interest in Property assigning Golden Phoenix's
                  rights, privileges and interest in Property, as described by
                  the Assignment, to Borealis Mining in the form attached hereto
                  as Exhibit D.

         3.7      GRYPHON GOLD CLOSING DELIVERIES. At the Closing, Gryphon Gold
shall deliver or cause to be delivered to the Escrow Agent the Pledged Stock.


                                     - 4 -

<PAGE>

         3.8      SOLE POSSESSION AND BENEFIT. On the Closing Date, Golden
Phoenix shall deliver or cause to be delivered to Borealis Mining sole
possession and benefit of the Property.

                                   ARTICLE 4

                             CONDITIONS OF CLOSING

         4.1      CONDITIONS IN FAVOR OF GOLDEN PHOENIX. The obligations of
Golden Phoenix under this Agreement shall be subject to the fulfilment, or the
waiver by Golden Phoenix, of the following conditions at or prior to the
Closing, each of which is for the exclusive benefit of Golden Phoenix and may be
waived by Golden Phoenix at any time, in whole or in part, in its sole
discretion without prejudice to any other rights that it may have:

         (a)      Borealis Mining shall have performed and completed in all
                  material respects all of the terms and conditions in this
                  Agreement on its part to be performed or complied with at or
                  before Closing and shall have executed and delivered or caused
                  to have been executed and delivered to Golden Phoenix at the
                  Closing all the documents contemplated in Section 3.6 or
                  elsewhere in this Agreement;

         (b)      Gryphon Gold shall have performed and completed in all
                  material respects all of the terms and conditions in this
                  Agreement on its part to be performed or complied with at or
                  before Closing and shall have delivered or caused to have been
                  delivered to the Escrow Agent at the Closing the Pledged Stock
                  contemplated in Section 3.7 or elsewhere in this Agreement;

         (c)      The representations and warranties of Borealis Mining set
                  forth in this Agreement shall have been true and correct in
                  all material respects at and as of the time of execution of
                  this Agreement except as affected by transactions contemplated
                  or permitted by this Agreement and except to the extent that
                  any such representation or warranty is made as of a specified
                  date, in which case such representation or warranty shall have
                  been true and correct in all material respects as of such
                  date;

         (d)      All necessary consents and approvals to the transfer of Golden
                  Phoenix's interest in the Property shall have been received;
                  and

         (e)      No action or proceeding shall be pending or shall have been
                  instituted by any Person to set aside or prohibit in any way
                  the transactions contemplated by this Agreement.

         4.2      CONDITIONS IN FAVOR OF BOREALIS MINING. The obligations of
Borealis Mining under this Agreement shall be subject to the fulfilment, or the
waiver by Borealis Mining, of the following conditions at or prior to the
Closing, each of which is for the exclusive benefit of Borealis Mining and may
be waived by Borealis Mining at any time, in whole or in part, in its sole
discretion without prejudice to any other rights that it may have:

         (a)      Golden Phoenix shall have performed and completed in all
                  material respects all of the terms and conditions in this
                  Agreement on its part to be performed or complied with at or
                  before Closing and shall have executed and delivered or


                                     - 5 -

<PAGE>

                  caused to have been executed and delivered to Borealis Mining
                  at the Closing all the documents contemplated in Section 3.5
                  or elsewhere in this Agreement;

         (b)      The representations and warranties of Golden Phoenix set forth
                  in this Agreement shall have been true and correct in all
                  material respects at and as of the time of execution of this
                  Agreement except as affected by transactions contemplated or
                  permitted by this Agreement and except to the extent that any
                  such representation or warranty is made as of a specified
                  date, in which case such representation or warranty shall have
                  been true and correct in all material respects as of such
                  date;

         (c)      All necessary consents and approvals to the assignment of the
                  Property shall have been received at or before the Closing;
                  and

         (d)      No action or proceeding shall be pending or shall have been
                  instituted by any Person to set aside or prohibit in any way
                  the transactions contemplated by this Agreement.

                                   ARTICLE 5

                   REPRESENTATIONS, WARRANTIES AND COVENANTS

         5.1      NEGATIVE COVENANT OF GRYPHON GOLD. Gryphon Gold covenants and
agrees that as long as any amount owing to Golden Phoenix is outstanding under
this Agreement, Gryphon Gold shall not, without the prior written consent of
Golden Phoenix and each of its assignees, which consent may be withheld for any
reason assign or permit to be assigned all or any part of the unreleased Pledged
Stock except in accordance with this Agreement.

         5.2      POSITIVE COVENANT OF BOREALIS MINING. Borealis Mining
covenants and agrees that as long as any amount or obligation remains
outstanding under this Agreement that it will pay all escrow costs that may
arise in connection with this Agreement.

         5.3      POSITIVE COVENANT OF GOLDEN PHOENIX. Golden Phoenix covenants
and agrees in good faith to cooperate with the perfecting of any right, claim,
title or interest relating to the Property including, but not limited to, the
execution of additional documents requested by Borealis Mining as may be
necessary or appropriate to perfect such right, claim, title or interest.

         5.4      REPRESENTATIONS AND WARRANTIES OF BOREALIS MINING. As a
material inducement to Golden Phoenix to enter into and complete this Agreement
and the transactions contemplated by this Agreement and, acknowledging that
Golden Phoenix is entering into this Agreement in reliance upon the
representations and warranties of Borealis Mining herein, Borealis Mining
represents and warrants to Golden Phoenix as follows:

         (a)      Borealis Mining is a duly incorporated corporation under the
                  laws of the State of Nevada and has the necessary power and
                  authority to own the Property;

         (b)      Borealis Mining has the power, authority and capacity to enter
                  into this Agreement and all other agreements and instruments
                  to be executed pursuant to this Agreement and to carry out its
                  obligations under this Agreement;


                                     - 6 -

<PAGE>

         (c)      The execution and delivery of this Agreement and such other
                  agreements and instruments and the completion of the
                  transactions contemplated by this Agreement have been duly
                  authorized by all necessary action on the part of Borealis
                  Mining and its directors;

         (d)      This Agreement constitutes a valid and binding obligation of
                  Borealis Mining enforceable against Borealis Mining in
                  accordance with its terms; and

         (e)      To the knowledge of Borealis Mining, there are no material
                  claims, actions, proceedings, suits, investigations or reviews
                  pending or commenced in respect of the Property or Borealis
                  Mining.

         5.5      REPRESENTATIONS AND WARRANTIES OF GOLDEN PHOENIX. As a
material inducement to Borealis Mining to enter into and complete this Agreement
and the transactions contemplated by this Agreement and, acknowledging that
Borealis Mining is entering into this Agreement in reliance upon the
representations and warranties of Golden Phoenix herein, Golden Phoenix
represents and warrants to Borealis Mining as follows:

         (a)      Golden Phoenix has good and marketable title to its interest
                  in the Property, subject only to all matters of record as
                  evidenced by the redacted Title Report and the Title Abstract
                  provided to Golden Phoenix by Borealis Mining. Other than this
                  Agreement there is no agreement, option or other right or
                  privilege outstanding in favor of any person for the purchase
                  from Golden Phoenix of any right, privilege or interest in the
                  Property;

         (b)      Golden Phoenix is a duly incorporated corporation under the
                  laws of the State of Minnesota and has the necessary power and
                  authority to own the Property;

         (c)      Golden Phoenix has the power, authority and capacity to enter
                  into this Agreement and all other agreements and instruments
                  to be executed pursuant to this Agreement and to carry out its
                  obligations under this Agreement;

         (d)      The execution and delivery of this Agreement and such other
                  agreements and instruments and the completion of the
                  transactions contemplated by this Agreement have been duly
                  authorized by all necessary action on the part of Golden
                  Phoenix and its directors;

         (e)      This Agreement constitutes a valid and binding obligation of
                  Golden Phoenix enforceable against Golden Phoenix in
                  accordance with its terms;

         (f)      To the knowledge of Golden Phoenix, there are no material
                  claims, actions, proceedings, suits, investigations or reviews
                  pending or commenced in respect of the Property or Golden
                  Phoenix;


                                     - 7 -

<PAGE>

         (g)      to the best of the Golden Phoenix's knowledge, unless
                  previously disclosed to Borealis Mining:

                           (i)    the Property and its existing and prior uses
                           comply and have at all times complied with, and
                           Golden Phoenix is not in violation of, and has not
                           violated, in connection with the ownership, use,
                           maintenance or operation of the Property, any
                           applicable federal, state, municipal or local laws,
                           regulations, orders or approvals relating to its
                           operations on the Property and environmental or
                           similar matters;

                           (ii)   has operated the Property and has at all times
                           received, handled, used, stored, treated, shipped and
                           disposed of all environmental or similar contaminants
                           in strict compliance with all applicable
                           environmental, health or safety laws, regulations,
                           orders or approvals, and

                           (iii)  there are no orders or directions relating to
                           environmental or similar matters requiring any work,
                           repairs, construction or capital expenditures with
                           respect to the Property and the conduct of the
                           business related thereto, nor has Golden Phoenix
                           received any notice of such;

                           (iv)   no hazardous or toxic materials, substances,
                           pollutants, contaminants or wastes have been released
                           into the environment, or deposited, discharged,
                           placed or disposed of at, on or near the Property as
                           a result of Golden Phoenix's operations carried out
                           on the Property, nor have any of the above occurred
                           nor has the Property been used at any time by any
                           person as a person as a landfill or waste disposal
                           site;

                           (v)    no notices of any violation or apparent
                           violation of any of the matters referred to in this
                           subparagraph (g) relating to the Property or its use
                           have been received by Golden Phoenix, and

                           (vi)   there are no writs, injunctions, orders or
                           judgments outstanding, no law suits, claims
                           proceedings or investigations pending or threatened,
                           relating to the use, maintenance or operation of the
                           Property, whether related to environmental or similar
                           matters, or otherwise, nor is there any basis for
                           such law suits, claims, proceedings or investigations
                           being instituted or filed;

         (h)      Golden Phoenix is solvent, as defined by law, and, to the best
                  of its knowledge, no proceedings are pending for and Golden
                  Phoenix is unaware of any basis for the institution of any
                  proceedings placing Golden Phoenix into bankruptcy or subject
                  to any other laws governing the affairs of insolvent persons.

         5.6      INDEMNITY. Each party to this Agreement agrees to indemnify
each other party and hold it harmless for, from and against all claims, damages,
costs and expenses (including reasonable attorneys' fees) attributable, directly
or indirectly, to the breach by such indemnifying party of any obligation
hereunder or the inaccuracy of any representation or warranty made by


                                     - 8 -

<PAGE>

such indemnifying party herein or in any instrument delivered pursuant hereto or
in connection with the transactions contemplated hereby.

                                   ARTICLE 6

                               GENERAL PROVISIONS

         6.1      BINDING EFFECT. This Agreement is binding upon and shall
inure to the benefit of the parties and their respective heirs, personal
representatives, administrators, successors and assigns.

         6.2      ATTORNEYS' FEES. If any action is brought by either party in
respect to its rights under this Agreement, the substantially prevailing party
shall be entitled to reasonable attorneys' fees and court costs as determined by
the court.

         6.3      WAIVERS. No waiver of any of the provisions of this Agreement
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver be a continuing waiver. Except as expressly provided in this
Agreement, no waiver shall be binding unless executed in writing by the party
making the waiver. Either party may waive any provision of this Agreement
intended for its benefit; provided, however, such waiver shall in no way excuse
the other party from the performance of any of its other obligations under this
Agreement.

         6.4      CONSTRUCTION. This Agreement shall be construed according to
Nevada law. References in this Agreement to "Articles" and "Sections" are to the
Articles and Sections of this Agreement, unless otherwise noted.

         6.5      TIME. Time is of the essence of this Agreement.

         6.6      NOTICES. Notices shall be in writing and shall be given by
personal delivery to a responsible person, by deposit in the United States mail,
certified mail, return receipt requested, postage prepaid, by express delivery
service, freight prepaid or by facsimile. Notices shall be delivered or
addressed to the parties at the addresses or facsimile numbers set forth on the
first page of this Agreement or at such other address or facsimile number as a
party may designate in writing. The date notice is deemed to have been given,
received and become effective shall be the date on which the notice is
delivered, if notice is given by personal delivery, or five (5) days following
the date of deposit in the mail or with an express delivery service, if the
notice is sent through the United States mail or by express delivery service or
on the date of receipt if the notice is sent via facsimile.

         6.7      NOTICE TO COUNSEL. Notices to Borealis Mining and/or Gryphon
Gold, as provided in Section 6.6, shall include a copy to:

                           Snell & Wilmer L.L.P.
                           Att: Lowell Thomas, Esq.
                           One S. Church Ave., Suite 1500
                           Tucson, AZ 85701-1630
                           Telephone: (520) 882-1221
                           Facsimile: (520) 884-1294


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<PAGE>

         6.8      FURTHER DOCUMENTATION. Each party agrees in good faith to
execute such further or additional documents as may be necessary or appropriate
to fully carry out the intent and purpose of this Agreement.

         6.9      TIME PERIODS. Except as expressly provided for herein, the
time for performance of any obligation or taking any action under this Agreement
shall be deemed to expire at 6:00 p.m. (Reno, Nevada time) on the last day of
the applicable time period provided for herein. If the time for the performance
of any obligation or taking any action under this Agreement expires on a
Saturday, Sunday or legal holiday, the time for performance or taking such
action shall be extended to the next succeeding day which is not a Saturday,
Sunday or legal holiday.

         6.10      HEADINGS AND COUNTERPARTS. The headings of this Agreement are
for purposes of reference only and shall not limit or define the meaning of any
provision of this Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument.

         6.11      LEGAL COUNSEL. Each party has had an opportunity to consult
with legal counsel regarding this Agreement. Each party has been fully,
separately, and independently appraised and advised of their respective legal
rights, remedies, privileges and obligations arising out of this Agreement.

         6.12      CONFIDENTIALITY. Any press releases or other documents
prepared for public dissemination relating to the transactions contemplated
herein shall not be disseminated until both Golden Phoenix and Borealis Mining
have provided consent to the contents thereof, such consent not to be
unreasonably withheld. Upon completion of the transactions contemplated herein,
Golden Phoenix shall keep confidential all information it has relating to the
Property except that which is otherwise in the public domain or unless Golden
Phoenix is compelled to disclose by virtue of law.

         6.13      ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter contained in this
Agreement. All prior and contemporaneous agreements, representations and
understandings of the parties, oral or written, are superseded by and merged in
this Agreement. No supplement, modification or amendment of this Agreement shall
be binding unless in writing and executed by Golden Phoenix, Borealis Mining and
Gryphon Gold.


            The remainder of this page is left intentionally blank.
                           Signature page to follow.


                                     - 10 -

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.



                                            GOLDEN PHOENIX MINERALS, INC.,
                                            a Minnesota corporation



                                            By:   /s/ Michael Fitzsimonds
                                                  ------------------------------
                                            Name: Michael Fitzsimonds
                                                  ------------------------------
                                            Its:  President
                                                  ------------------------------


                                            BOREALIS MINING COMPANY,
                                            a Nevada corporation



                                            By:   /s/ Allen Gordon
                                                  ------------------------------
                                            Name: Allen S. Gordon
                                            Its:  President


                                            GRYPHON GOLD CORPORATION,
                                            a Nevada corporation



                                            By:   /s/ Allen Gordon
                                                  ------------------------------
                                            Name: Allen Gordon
                                                  ------------------------------
                                            Its:  President
                                                  ------------------------------


                                     - 11 -

<PAGE>

                                    EXHIBIT A

                              PROPERTY DESCRIPTION



The Property shall include all rights, privileges and interests in the
following:

1.       The Acknowledgement of Assignment as described in Exhibit A-1 hereto.

2.       The Area of Interest as described in Exhibit A-2 hereto and subject to
         the terms of Article IX of the Earn-In Agreement.

3.       The Earn-In Agreement as described in Exhibit A-3 hereto.

4.       The Borealis Mining Lease as described in Exhibit A-4 hereto.

5.       The Borealis Claims as described in Exhibit A-5 hereto.

6.       All documentation, photos, reports, diagrams, samples, tools, files,
containers, fixtures and/or furnishings relating to the Property or its
operations, in the possession of Golden Phoenix and/or its advisors, including,
but not limited to, engineering reports and files, technical reports and files,
contract files, land files, recordings, maps and core drill samples, reverse
circulation drill samples, rotary drill samples, shelves to hold samples,
portable steel shipping containers and such.


                                     - 12 -

<PAGE>

                                   EXHIBIT A-1

                          ACKNOWLEDGEMENT OF ASSIGNMENT

That certain Acknowledgement of Assignment dated January 9, 2000, by Richard J.
Cavell TTTEE F/T Richard J. Cavell Trust dated 02/23/1994, Hardrock Mining
Company, a Nevada corporation, and John W. Whitney, as Lessors, concurring to
the assignment of the Borealis Mining Lease by J.D. Welsh & Associates, Inc., a
Nevada corporation, to Golden Phoenix as described in Exhibit A-1 hereto a copy
of which is attached hereto.


                                     - 13 -

<PAGE>

                                   EXHIBIT A-2

                                AREA OF INTEREST

The Area of Interest is the same as the Borealis Project Area as described in
Exhibit III of the Borealis Mining Lease, a copy of which is attached hereto.


                                     - 14 -

<PAGE>

                                   EXHIBIT A-3

                                EARN-IN AGREEMENT

That certain Earn-In Agreement dated July 21, 2003, by and between Golden
Phoenix and Borealis Mining, a copy of which is attached hereto.


                                     - 15 -

<PAGE>

                                   EXHIBIT A-4

                              BOREALIS MINING LEASE

That certain Mining Lease dated January 24, 1997, by and between Richard J.
Cavell TTTEE F/T Richard J. Cavell Trust dated 02/23/1994, Hardrock Mining
Company, a Nevada corporation, and John W. Whitney, as Lessors, and J.D. Welsh &
Associates, Inc., a Nevada corporation, as lessee, memorandum of which is
recorded as Entry 115828 in Book 169 at page 489 in the official records of
Mineral County, Nevada, a copy of which is attached hereto, subject to the
Acknowledgement of Assignment by the Lessors, as described in Exhibit A-1.


                                     - 16 -

<PAGE>

                                   EXHIBIT A-5

                                 BOREALIS CLAIMS

The claims described on the following pages attached hereto.


                                     - 17 -

<PAGE>

                                    EXHIBIT B

                       ASSIGNMENT OF BOREALIS MINING LEASE

That Assignment of Borealis Mining Lease in the form attached hereto.


                                     - 18 -

<PAGE>

                                    EXHIBIT C

                         CONSENT TO ASSIGNMENT OF LEASE

That Consent to Assignment of Lease in the form attached hereto.


                                     - 19 -

<PAGE>

                                    EXHIBIT D

                       ASSIGNMENT OF INTEREST IN PROPERTY

That Assignment of Interest in Property in the form attached hereto.


                                     - 20 -
<PAGE>

                                 FIRST AMENDMENT
                                       TO
                               PURCHASE AGREEMENT

         This First Amendment to Purchase Agreement ("First Amendment") is made
by and among Golden Phoenix Minerals, Inc., a Minnesota corporation ("Golden
Phoenix"), Borealis Mining Company, a Nevada corporation ("Borealis Mining"),
and Gryphon Gold Corporation, a Nevada corporation ("Gryphon Gold") as of
January 13, 2005. This Amendment shall amend, supplement and modify that
certain purchase agreement among Golden Phoenix, Borealis Mining and Gryphon
Gold dated January 10, 2005 (the "Purchase Agreement"). In the event of any
conflict between this First Amendment and the Purchase Agreement, this First
Amendment shall control.

                                    RECITALS

         A.       Golden Phoenix and Borealis Mining entered into the Purchase
Agreement for the purchase of that certain property more specifically described
in Exhibit A of the Purchase Agreement (the "Property"); and

         B.       Pursuant to the terms of the Purchase Agreement, the closing
of the transaction (the "Closing") shall take place at 10:00 a.m. on or before
January 18, 2005 (the Closing Date"), at the Tucson offices of Snell & Wilmer
LLP; and

         C.       A condition to Closing of Golden Phoenix and Borealis Mining
is the delivery of a Consent to Assignment of the Borealis Mining Lease (the
"Consent") whereby the owner/lessor of the Property shall consent to the
assignment of Golden Phoenix's interest in the Property; and

         D.       The parties have yet to obtain the Consent; and

         E. Golden Phoenix, Borealis Mining and Gryphon Gold now wish to extend
the Closing Date and to amend the Purchase Agreement to reflect such extension
to allow the parties to obtain the Consent.

                            AGREEMENT OF THE PARTIES

         In consideration of the foregoing recitals, which are incorporated
herein by this reference, and for other consideration, the receipt of which is
hereby acknowledged, the parties hereto hereby amend the Purchase Agreement, and
agree, as follows:

1.       Extension of Closing Date.  The Closing Date, as defined in the
Purchase Agreement, is hereby extended to 10:00 a.m. on January 31, 2005, at the
Tucson offices of Snell & Wilmer LLP, or such earlier date that the parties
obtain a signed original of the Consent signed by the owner/lessor of the
Property.

2.       Defined Terms.  Any capitalized terms herein shall have the meanings,
if any, ascribed in the Purchase Agreement.

<PAGE>

3.       Purchase Agreement in Full Force.  Except as provided herein, all
original terms and provisions of the Purchase Agreement remain in full force and
effect.

4.       Counterparts.  This Amendment may be executed in counterparts,
including by facsimile, with each counterpart being deemed an original.

IN WITNESS WHEREOF, this First Amendment is executed by the parties hereto as of
date first set forth above.

                                            GOLDEN PHOENIX MINERALS, INC.,
                                            a Minnesota corporation



                                            By: /S/ Michael Fitzsimonds
                                               ---------------------------------
                                            Name: Michael Fitzsimonds
                                            Its: President


                                            BOREALIS MINING COMPANY,
                                            a Nevada corporation



                                            By: /s/ Allen Gordon
                                               ---------------------------------
                                            Name: Allen S. Gordon
                                            Its: President


                                            GRYPHON GOLD CORPORATION,
                                            a Nevada corporation



                                            By: /s/ Allen Gordon
                                               ---------------------------------
                                            Name: Allen S. Gordon
                                            Its: President


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