Document:

gpxm10q20100331ex10-2.htm

    
      

      

    

    
      Exhibit 10.2

    

    Golden
Phoenix Minerals, Inc.

    1675 East
Prater Way, Suite 102

    Reno, NV
89434

    

    

    January
13, 2010

    

    

    Crestview
Capital Master, LLC

    95 Revere
Drive, Suite A

    Northbrook,
IL 60062

    
 

    
      
        	 
      	
                Re:

              	
                Amended
      and Restated Bridge Loan Secured Promissory Note (the “Amended Bridge
      Note”) dated as of February 6, 2009, entered into on October 29,
      2009

              

      

        

      To whom
it may concern:

    

    

    This
letter sets forth our agreement with respect to the modification of certain
terms related to the Amended Bridge Note and certain other matters related to
the Bridge Note and Debt Restructuring Agreement (“Agreement”) entered into by
the parties dated as of January 30, 2009 and each of the “Transaction Documents”
as defined therein (all capitalized terms not defined herein shall have the
meaning ascribed to them in the Transaction Documents).  In
consideration of the mutual agreements set forth herein and other good and
valuable consideration, we agree as follows:

    

    
      	
               
      

            	
              1.

            	
              The
      parties agree that in the event Golden Phoenix Minerals, Inc. (“Golden
      Phoenix”) has not closed a joint venture transaction related to the
      mineral property known as Mineral Ridge on or before the Maturity Date of
      the Amended Bridge Note, or within any one week period thereafter, due to
      circumstances beyond its reasonable control, Crestview Capital Master, LLC
      (“Crestview”) will, subject to the terms hereof, agree to extend the
      Maturity Date for successive one (1) week periods for an extension fee of
      Ten Thousand Dollars ($10,000) per each one (1) week period, prorated for
      any portion thereof (“Extension Fee”) up to and through April 6, 2010
      (“Outside Maturity Date”). Each request for a weekly extension shall be
      delivered to Crestview by email at least two (2) business days prior to
      the start of such extension and shall set forth in reasonable detail the
      circumstances preventing the closing of the transaction and Golden
      Phoenix’s anticipated timing and means of repaying the Amended Bridge
      Note, as further amended, on or prior to April 6, 2010.  The
      parties agree that a Second Amended and Restated Bridge Loan Second
      Promissory Note will be executed to further evidence said
      change.

            

    

    

    
      	
               
      

            	
              2.

            	
              The
      parties agree that any such Extension Fees shall be aggregated and added
      to the Principal Amount and hence be subject to the same terms and
      conditions of the Amended Bridge Note, as further amended, and that as
      amended the Amended Bridge Note shall remain subject to the Agreement and
      all of the Transaction Documents, including this
  letter.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              3.

            	
              It
      is understood and agreed that the remaining Transaction Documents,
      including, but not limited to, the Agreement, the Amended and Restated
      Debt Restructuring Secured Promissory Note, the Bridge Warrant, the
      Amended and Restated Debt Restructuring Warrant and the Amended Security
      Agreement and Mortgage, remain in full force and effect, as provided for
      therein, without further amendment.

            

    

    
    

    
      	
               
      

            	
              4.

            	
              Attached
      hereto is a form of the Second Amended and Restated Bridge
      Note.  Crestview will return the original Amended Bridge Note
      upon receipt of the foregoing duly executed by Golden
    Phoenix.

            

    

    

    
      	
               
      

            	
              5.

            	
              Each
      party represents to the other that this letter agreement and the
      instruments to be executed by each pursuant hereto have been duly
      authorized by all requisite corporate action and is or will be binding and
      enforceable in accordance with its
terms.

            

    

    

    

    Kindly
confirm your agreement to the foregoing by signing a copy hereof at the place
provided below and return that copy to the undersigned.
 

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	
              Golden
      Phoenix Minerals, Inc.

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              By: /s/ Robert P.
      Martin                  
      

            
	 
      	
                   Name:  Robert
      P. Martin

            
	 
      	
                   Title:    President

            

    

    

    ACCEPTED
AND AGREED:

    

    By:  Crestview
Capital Partners, L.P.

    (sole manager)

    

    

    By: /s/ Daniel I.
Warsh             

    Name: 
Daniel I. Warsh

    Title:   
Manager

     

     

    
 

    
      2gpxm10q20100331ex10-4.htm

    
      
        

        

      

      Exhibit 10.4

      

       

      

      

      OPERATING
AGREEMENT

      

      FOR

      

      MINERAL
RIDGE GOLD, LLC,

      

      a
Nevada limited liability company

      

       

       

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      

      
        	 
      	 
      	 
      Page
	 
      	 
      	 	 
      
	
                EXHIBITS

              	 	
                v

              
	 
      	 
      	 	 
      
	
                ARTICLE
      I           DEFINITIONS AND
      CROSS-REFERENCES

              	 	
                1

              
	
                1.1

              	
                Definitions

              	 	
                1

              
	
                1.2

              	
                Cross
      References

              	 	
                1

              
	 
      	 
      	 	 
      
	
                ARTICLE
      II          NAME, PURPOSES AND
      TERM

              	 	
                2

              
	
                2.1

              	
                Formation

              	 	
                2

              
	
                2.2

              	
                Name

              	 	
                2

              
	
                2.3

              	
                Purposes

              	 	
                2

              
	
                2.4

              	
                Limitation

              	 	
                2

              
	
                2.5

              	
                Term

              	 	
                2

              
	
                2.6

              	
                Registered
      Agent; Offices

              	 	
                3

              
	 
      	 
      	 	 
      
	
                ARTICLE
      III         CONTRIBUTIONS BY
      MEMBERS

              	 	
                3

              
	
                3.1

              	
                Members’
      Initial Contributions

              	 	
                3

              
	
                3.2

              	
                Record
      Title

              	 	
                3

              
	 
      	 
      	 	 
      
	
                ARTICLE
      IV         INTERESTS OF
      MEMBERS

              	 	
                3

              
	
                4.1

              	
                Initial
      Ownership Interests

              	 	
                3

              
	
                4.2

              	
                Changes
      in Ownership Interests

              	 	
                4

              
	
                4.3

              	
                Admission
      of New Members

              	 	
                6

              
	
                4.4

              	
                Documentation
      of Adjustments to Ownership Interests

              	 	
                6

              
	
                4.5

              	
                Distributions
      to Members

              	 	
                6

              
	 
      	 
      	 	 
      
	
                ARTICLE
      V          RELATIONSHIP OF THE
      MEMBERS

              	 	
                6

              
	
                5.1

              	
                Limitation
      on Authority of Members

              	 	
                6

              
	
                5.2

              	
                Federal
      Tax Elections and Allocations

              	 	
                7

              
	
                5.3

              	
                State
      Income Tax

              	 	
                7

              
	
                5.4

              	
                Tax
      Returns

              	 	
                7

              
	
                5.5

              	
                Other
      Business Opportunities

              	 	
                7

              
	
                5.6

              	
                Waiver
      of Rights to Partition or Other Division of Assets

              	 	
                7

              
	
                5.7

              	
                Bankruptcy
      of a Member

              	 	
                7

              
	
                5.8

              	
                Implied
      Covenants

              	 	
                7

              
	
                5.9

              	
                Certificate
      of Ownership Interest

              	 	
                7

              
	
                5.10

              	
                Disposition
      of Production

              	 	
                8

              
	
                5.11

              	
                Limitation
      of Liability

              	 	
                8

              
	
                5.12

              	
                Indemnities

              	 	
                8

              
	
                5.13

              	
                No
      Third Party Beneficiary Rights

              	 	
                8

              
	 
      	 
      	 	 
      
	
                ARTICLE
      VI         REPRESENTATIONS AND
      WARRANTIES

              	 	
                9

              

         

        
          
            
            

          

          
            -ii-

            
              

            

          

          
            
            

          

        

         

        
          
            	
                    ARTICLE
      VII        TRANSFER OF INTEREST; PREEMPTIVE
      RIGHT

                  	 	
                    9

                  
	
                    7.1

                  	
                    General

                  	 	
                    9

                  
	
                    7.2

                  	
                    Limitations
      on Free Transferability

                  	 	
                    9

                  
	
                    7.3

                  	
                    Preemptive
      Right

                  	 	
                    11

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      VIII      MANAGEMENT COMMITTEE

                  	 	
                    12

                  
	
                    8.1

                  	
                    Organization
      and Composition

                  	 	
                    12

                  
	
                    8.2

                  	
                    Decisions

                  	 	
                    12

                  
	
                    8.3

                  	
                    Meetings

                  	 	
                    12

                  
	
                    8.4

                  	
                    Action
      Without Meeting in Person

                  	 	
                    13

                  
	
                    8.5

                  	
                    Matters
      Requiring Approval

                  	 	
                    13

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      IX         MANAGER

                  	 	
                    13

                  
	
                    9.1

                  	
                    Appointment

                  	 	
                    13

                  
	
                    9.2

                  	
                    Powers
      and Duties of Manager

                  	 	
                    13

                  
	
                    9.3

                  	
                    Standard
      of Care

                  	 	
                    17

                  
	
                    9.4

                  	
                    Resignation;
      Deemed Offer to Resign

                  	 	
                    18

                  
	
                    9.5

                  	
                    Payments
      To Manager

                  	 	
                    18

                  
	
                    9.6

                  	
                    Transactions
      With Affiliates

                  	 	
                    19

                  
	
                    9.7

                  	
                    Activities
      During Deadlock

                  	 	
                    19

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      X          PROGRAMS AND
      BUDGETS

                  	 	
                    19

                  
	
                    10.1

                  	
                    Initial
      Program and Budget

                  	 	
                    19

                  
	
                    10.2

                  	
                    Operations
      Pursuant to Programs and Budgets

                  	 	
                    19

                  
	
                    10.3

                  	
                    Presentation
      of Programs and Budgets

                  	 	
                    19

                  
	
                    10.4

                  	
                    Review
      and Adoption of Proposed Programs and Budgets

                  	 	
                    20

                  
	
                    10.5

                  	
                    Election
      to Participate

                  	 	
                    20

                  
	
                    10.6

                  	
                    Recalculation
      or Restoration of Reduced Interest Based on Actual
      Expenditures

                  	 	
                    21

                  
	
                    10.7

                  	
                    Expansion
      or Modification Programs and Budgets

                  	 	
                    22

                  
	
                    10.8

                  	
                    Budget
      Overruns; Program Changes

                  	 	
                    22

                  
	
                    10.9

                  	
                    Supplemental
      Business Arrangement

                  	 	
                    22

                  
	
                    10.10

                  	
                    Drilling
      Program

                  	 	
                    23

                  
	 
      	 
      	 	 
      
	
                    ARTICLE
      XI         ACCOUNTS AND
      SETTLEMENTS

                  	 	
                    23

                  
	
                    11.1

                  	
                    Monthly
      Statements

                  	 	
                    23

                  
	
                    11.2

                  	
                    Cash
      Calls

                  	 	
                    23

                  
	
                    11.3

                  	
                    Failure
      to Meet Cash Calls

                  	 	
                    23

                  
	
                    11.4

                  	
                    Cover
      Payment

                  	 	
                    23

                  
	
                    11.5

                  	
                    Remedies

                  	 	
                    24

                  
	
                    11.6

                  	
                    Audits

                  	 	
                    25

                  

          

           

          
            
              
              

            

            
              -iii-

              
                

              

            

            
              
              

            

          

           

          	
                  ARTICLE
      XII        PROPERTIES

                	 	
                  25

                
	
                  12.1

                	
                  Royalties,
      Production Taxes and Other Payments Based on Production

                	 	
                  25

                
	
                  12.2

                	
                  Abandonment
      and Surrender

                	 	
                  26

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      XIII      CONFIDENTIALITY, OWNERSHIP, USE AND
      DISCLOSURE OF INFORMATION

                	 	
                  26

                
	
                  13.1

                	
                  Business
      Information

                	 	
                  26

                
	
                  13.2

                	
                  Member
      Information

                	 	
                  26

                
	
                  13.3

                	
                  Permitted
      Disclosure of Confidential Business Information

                	 	
                  26

                
	
                  13.4

                	
                  Disclosure
      Required By Law

                	 	
                  27

                
	
                  13.5

                	
                  Public
      Announcements

                	 	
                  27

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      XIV      RESIGNATION AND
    DISSOLUTION

                	 	
                  28

                
	
                  14.1

                	
                  Events
      of Dissolution

                	 	
                  28

                
	
                  14.2

                	
                  Resignation

                	 	
                  28

                
	
                  14.3

                	
                  Disposition
      of Properties and Assets Dissolution

                	 	
                  28

                
	
                  14.4

                	
                  Filing
      of Certificate of Cancellation

                	 	
                  28

                
	
                  14.5

                	
                  Right
      to Data After Dissolution

                	 	
                  29

                
	
                  14.6

                	
                  Continuing
      Authority

                	 	
                  29

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      XV       DISPUTES

                	 	
                  29

                
	
                  15.1

                	
                  Governing
      Law

                	 	
                  29

                
	
                  15.2

                	
                  Forum
      Selection

                	 	
                  29

                
	
                  15.3

                	
                  Arbitration

                	 	
                  29

                
	
                  15.4

                	
                  Dispute
      Resolution

                	 	
                  29

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      XVI      GENERAL PROVISIONS

                	 	
                  30

                
	
                  16.1

                	
                  Notices

                	 	
                  30

                
	
                  16.2

                	
                  Gender

                	 	
                  31

                
	
                  16.3

                	
                  Currency

                	 	
                  31

                
	
                  16.4

                	
                  Headings

                	 	
                  31

                
	
                  16.5

                	
                  Waiver

                	 	
                  31

                
	
                  16.6

                	
                  Modification

                	 	
                  31

                
	
                  16.7

                	
                  Force
      Majeure

                	 	
                  31

                
	
                  16.8

                	
                  Rule
      Against Perpetuities

                	 	
                  32

                
	
                  16.9

                	
                  Further
      Assurances

                	 	
                  32

                
	
                  16.10

                	
                  Entire
      Agreement; Successors and Assigns

                	 	
                  32

                
	
                  16.11

                	
                  Counterparts

                	 	
                  32

                

        

      

       

      
        
          
          

        

        
          -iv-

          
            

          

        

        
          
          

        

         

      

      
        	 
      	
                EXHIBITS

              
	 
      	 
      	 
      
	 
      	
                EXHIBIT
      A

              	
                PROPERTIES
      AND ASSETS AND AREA OF INTEREST

              
	 
      	
                EXHIBIT
      B

              	
                ACCOUNTING
      PROCEDURES

              
	 
      	
                EXHIBIT
      C

              	
                TAX
      MATTERS

              
	 
      	
                EXHIBIT
      D

              	
                DEFINITIONS

              
	 
      	
                EXHIBIT
      E

              	
                INSURANCE

              
	 
      	
                EXHIBIT
      F

              	
                PREEMPTIVE
      RIGHTS

              
	 
      	
                EXHIBIT
      G

              	
                QUITCLAIM
      DEED

              
	 
      	
                EXHIBIT
      H

              	
                LETTER
      AGREEMENT BETWEEN GPXM, SCORPIO US AND CRESTVIEW

              
	 
      	 
      	 
      
	 
      	
                SCHEDULE

              	 
      
	 
      	 
      	 
      
	 
      	
                Schedule
      of Members

              

      

      

      
        
           

        

        
          -v-

          
            

          

        

        
           

        

      

      LIMITED
LIABILITY COMPANY OPERATING AGREEMENT

      OF

      MINERAL
RIDGE GOLD, LLC

      A
Nevada Limited Liability Company

      

      This
Limited Liability Company Operating Agreement is made as of March 10, 2010
(“Effective Date”)
between Golden Phoenix Minerals, Inc., a Nevada corporation (“GPXM”), the address of which
is 1675 East Prater Way, #102, Sparks, Nevada, 89434, and Scorpio Gold (US)
Corporation, a Nevada corporation (“Scorpio US”), a wholly owned
indirect subsidiary of Scorpio Gold Corporation (“Scorpio Gold”) the address of
which is 995 Germain Street, Val d’Or, Quebec, J9P 7H7, Canada.

      

      RECITALS

      

      A.    
       GPXM owns or controls certain
properties in the County of Esmeralda, State of Nevada, which properties are
described in Exhibit A and defined in
Exhibit D.

      

      B.    
       Scorpio Gold, through its wholly owned
subsidiary Scorpio US, also owns or controls certain properties in the County of
Esmeralda, State of Nevada described in Exhibit A, and wishes to participate
with GPXM in the exploration, evaluation and, if justified, the development and
mining of mineral resources within their
combined  Properties.

      

      C.     
      Pursuant to that certain Members Agreement
by and between GPXM, Scorpio US and Scorpio Gold dated as of December 31, 2009,
GPXM has sold to Scorpio US an undivided seventy percent (70%) interest in the
Properties and Assets owned by GPXM, with GPXM maintaining an undivided thirty
percent (30%) interest in such Properties and the Assets.

      

      D.     
      GPXM and Scorpio US wish to form and operate
a limited liability company under the Nevada Limited Liability Company Act, as
codified in the Nevada Revised Statutes, Chapter 86 et seq., as the same may be
amended from time to time (the “Act”), to own the Properties
and the Assets and conduct the operations thereon and therewith as contemplated
by Recital B.

      

      NOW
THEREFORE, in consideration of the covenants and conditions contained herein,
GPXM, Scorpio US and Scorpio Gold agree as follows:

      

      ARTICLE
I

      DEFINITIONS
AND CROSS-REFERENCES

      

      1.1           Definitions. The terms defined
in Exhibit D and
elsewhere herein shall have the defined meaning wherever used in this Agreement,
including in Exhibits.

      

      1.2           Cross References. References
to “Exhibits,” “Articles,” “Sections” and “Subsections” refer to Exhibits,
Articles, Sections and Subsections of this Agreement. References to “Paragraphs”
and “Subparagraphs” refer to paragraphs and subparagraphs of the referenced
Exhibits.

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      ARTICLE
II

      NAME,
PURPOSES AND TERM

      

      2.1           Formation.  The
Company has been duly organized pursuant to the Act and the provisions of this
Agreement as a Nevada  limited liability company by the filing of its
Articles of Organization (as defined in the Act) in the Office of the Secretary
of the State of Nevada effective as of the Effective Date.

      

      2.2           Name.  The name of
the Company is “Mineral Ridge Gold, LLC” and such other name or names complying
with the Act as the Manager shall determine.  The Manager shall
accomplish any filings or registrations required by jurisdictions in which the
Company conducts its Business.

      

      2.3           Purposes. The Company is
formed for the following purposes and for no others, and shall serve as the
exclusive means by which each of the Members accomplishes such
purposes:

      

      (a)           to
conduct Exploration within the Area of Interest,

      

      (b)           to
acquire additional real property and other interests within the Area of
Interest,

      

      (c)           to
evaluate the possible Development and Mining of the Properties, and, if
justified, to engage in Development and Mining,

      

      (d)           to
engage in Operations on the Properties,

      

      (e)           to
engage in marketing Products,

      

      (f)       
    to complete and satisfy all Environmental Compliance
obligations and Continuing Obligations affecting the Properties,
and

      

      (g)           to
perform any other activity necessary, appropriate, or incidental to any of the
foregoing.

      

      2.4           Limitation. Unless the Members
otherwise agree in writing, the Business of the Company shall be limited to the
purposes described in Section
2.3, and nothing in this Agreement shall be construed to enlarge such
purposes.

      

      2.5           Term.  The term of
the Company shall begin on the Effective Date and shall continue for twenty (20)
years from the Effective Date and for so long thereafter as Products are
produced from the Properties on a continuous basis, and thereafter until all
materials, supplies, equipment and infrastructure have been salvaged and
disposed of, and any required Environmental Compliance is completed and
accepted, unless the Company is earlier terminated as herein
provided.  For purposes hereof, Products shall be deemed to be
produced from the Properties on a “continuous basis” so long as production in
commercial quantities is not halted for more than one hundred eighty (180)
consecutive days.

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      

      2.6           Registered Agent; Offices. The
name of the Company’s registered agent in the State of Nevada is Paracorp
Incorporated or such other person as the Manager may select in compliance with
the Act from time to time.  The registered office of the Company in
the State of Nevada shall be located at 318 North Carson Street, Suite 208,
Carson City, Nevada 89701 or at any other place within the State of Nevada which
the Manager shall select.  The principal office of the Company shall
be at any other location which the Manager shall select.

      

      ARTICLE
III

      CONTRIBUTIONS
BY MEMBERS

      

      3.1           Members’ Initial
Contributions.

      

      (a)      
     GPXM, as its Initial Contribution, hereby
contributes its undivided thirty percent (30%) interest in the Properties owned
by it as described in Exhibit A pursuant to a
Quitclaim Deed in substantially the form attached hereto as Exhibit G, as well as all
Assets owned by it as described in Exhibit A (collectively, the
“Assets”), and the Bond related to such Properties to the capital of the
Company.  The amount of Five Million Four Hundred Eighty Thousand Four
Hundred Fifty-Four Dollars and Ninety-Five Cents ($5,480,454.95), representing
the mutually agreed upon value of Golden Phoenix’s thirty percent (30%) retained
interest in the Properties and Assets and the Bond shall be credited to GPXM’s
Equity Account on the Effective Date with respect to GPXM’s Initial
Contribution.

      

      (b)           Scorpio
US, as its Initial Contribution, hereby contributes all of its interest in the
Properties described in Exhibit A to the capital
of the Company, pursuant to a Quitclaim Deed in substantially the form attached
hereto as Exhibit G, as
well as all of its interest in the Assets described in Exhibit A and the Mary Mining
Royalty.  The amount of  Twelve Million Seven Hundred
Eighty-Seven Thousand Seven Hundred Twenty-Eight Dollars and Twenty-Two Cents
($12,787,728.22), representing the mutually agreed upon value of Scorpio US’s
interest in the Properties, Assets and Mary Mining Royalty shall be credited to
Scorpio US’s Equity Account on the Effective Date with respect to Scorpio US’s
Initial Contribution.

      

      3.2           Record Title. Title to the
Properties and the Assets shall be held by the Company.

      

      ARTICLE
IV

      INTERESTS
OF MEMBERS

      

      4.1           Initial Ownership Interests.
The Members shall have the following initial Ownership Interests:

      

      Scorpio
US – 70%

      GPXM
–         30%

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      4.2           Changes in Ownership Interests and
Scorpio US Option.

      

      (a)       
    Dispositions of Ownership
Interest.  The Ownership Interests shall be eliminated as
follows:

      

      (i)           Upon
resignation as provided in Article XIV;

      

      (ii)          Upon
Transfer by either Member of part or all of its Ownership Interest in accordance
with Article VII;
or

      

      (iii)         Upon
acquisition by either Member of part or all of the Ownership Interest of the
other Member, however arising.

      

      (b)           Adjustments and
Recalculations of Ownership Interests.  The Ownership Interests
shall be adjusted or recalculated as follows:

      

      (i)           In
the event Scorpio US elects, at its sole and absolute discretion, to deposit an
amount equal to one hundred percent (100%) of the estimated capital expenditures
required to place the Properties into Commercial Production as confirmed by a
Feasibility Study prepared in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects, plus an amount equal to up to an
additional twenty percent (20%) of such capital expenditures, but less such
amounts as have already been expended, into the Business Account, as and when
required, and subsequently brings the Properties into Commercial Production
within 30 months from the Closing Date (as defined below), the Members’
respective Ownership Interests shall automatically adjust such that Scorpio US’s
Ownership Interest shall increase to eighty percent (80%) and GPXM’s Ownership
Interest shall decrease to twenty percent (20%). Amounts deposited which are not
required to bring the Properties into Commercial Production will be repaid to
Scorpio US.

      

      (ii)          Upon
an election by either Member pursuant to Section 10.5 to
contribute less to an adopted Program and Budget than the percentage equal to
its Ownership Interest, or to contribute nothing to an adopted Program and
Budget and subject to Subsection 10.5(b)(iii);
or

      

      (iii)         In
the event of default by either Member in making its agreed-upon contribution to
an adopted Program and Budget, followed by an election by the other Member to
invoke any of the remedies in Section 11.5 subject to
the limitation set forth therein; and

      

      (iv)        Any
adjustment to the Members’ relative Ownership Interests pursuant to the
provisions noted above shall not cause or be caused by, nor result in or be the
result of, any actual or deemed transfer or other disposition of any part of any
Ownership Interest by one Member to the other Member.

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      (c)           Scorpio US
Option.

      

      (i)           If,
within 30 months after the Closing of the transactions contemplated by the
Agreement (the “Closing Date”), Scorpio US brings the Properties into Commercial
Production, it shall have the vested right and option, but not the obligation,
to purchase GPXM’s remaining Ownership Interest for a purchase price equal to
the net asset value (“NAV”) of the Properties and
the Assets, determined at the time of the purchase by Scorpio US in accordance
with this Section 4.2(c)(i), multiplied by GPXM’s then existing Ownership
Interest. Upon Scorpio US bringing the Properties into Commercial Production
within 30 months of the Closing Date (the “Production Date”), this vested right
and option will exist for a period of 24 months after commencement of Commercial
Production.  For purposes of this Subsection 4.2(c), the NAV of
the Properties and the Assets shall be determined by Marshall Stevens, Inc., an
independent financial and valuation consulting firm, using no more than a 10%
discount rate and such exploration and production data derived from the
Properties and available as at a date within 30 days of the date of the NAV
analysis.

      

      (ii)   
     In the event that Scorpio US does not exercise its
option to increase its Ownership Interest by an additional ten percent (10%)
pursuant to Subsection
4.2(b)(i), GPXM’s Ownership Interest will increase by five percent (5%)
and Scorpio US’s Ownership Interest shall decrease by five percent (5%), subject
to Scorpio US having the vested right and option, but not the obligation, for a
further period of 12 months from the Production Date to purchase GPXM’s then
existing Ownership Interest for a purchase price as set forth in Subsection 4.2(c)(i)
above.

      

      (iii)         In
the event that Scorpio US does not bring the Properties into Commercial
Production in accordance with Subsections 4.2(c)(i) or (ii), then Scorpio US’s
Ownership Interest shall be no less than seventy percent (70%), and GPXM’s
Ownership Interest shall be no greater than thirty percent (30%), and Scorpio US
and GPXM will be required to fund approved Programs and Budgets in proportion to
its respective Ownership Interest on an ongoing basis or be subject to Subsection
10.5(b).

      

      (iv)        In
the event that Scorpio US brings the Properties into Commercial Production but
does not purchase GPXM’s Ownership Interest under Subsections 4.2(c)(i) or (ii),  Scorpio US
and GPXM will each be required to fund all approved Programs and Budgets in
proportion to its respective Ownership Interest on an ongoing basis or be
subject to Subsection
10.5(b).

      

      (v)         Any
adjustment to the Members’ relative Ownership Interests pursuant to the
provisions noted above shall not cause or be caused by, nor result in or be the
result of, any actual or deemed transfer or other disposition of any part of any
Ownership Interest by one Member to the other Member.

      

      (vi)        Scorpio
US shall give GPXM 90 days notice of its intent to purchase GPXM’s Ownership
Interest pursuant to Subsections 4.2(c)(i) or (ii).  Within 30
days of receipt of Scorpio US’ notice of intent to purchase GPXM’s Ownership
Interest, GPXM will either (i) file a proxy statement with the United States
Securities and Exchange Commission (the “SEC”) seeking shareholder approval of
the sale of GPXM’s Ownership Interest in the Company at GPXM’s cost, or (ii)
provide Scorpio US with a letter stating that based on the opinion of its legal
counsel, no shareholder approval is necessary in order for GPXM to sell its
Ownership Interest in the Company.

      
        
           

        

        
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      Notwithstanding
GPXM’s letter to Scorpio US stating that no shareholder approval is necessary in
order for GPXM to sell its Ownership Interest in the Company, Scorpio US can
request GPXM to seek shareholder approval of the sale of GPXM’s Ownership
Interest at Scorpio US’ cost and GPXM will promptly do so.  In
addition, in the event that a GPXM shareholder files suit or threatens to file
suit to force GPXM to seek shareholder approval for the sale of its Ownership
Interest in the Company, GPXM shall then file a proxy statement with the SEC
seeking shareholder approval of the sale GPXM’s Ownership Interest in the
Company at GPXM’s cost.

      

      In the
event that GPXM’s shareholders do not approve of the sale of its Ownership
Interest in the Company at an annual or special meeting called for such purpose
as discussed above, then GPXM’s Ownership Interest shall be reduced by
5%.

      

      4.3           Admission of New Members.
Except in the event of a transfer permitted pursuant to Article VII, a new member may
be admitted only with the unanimous written approval of the
Members.

      

      4.4           Documentation of Adjustments to
Ownership Interests. Each Member’s Ownership Interest and related Equity
Account balance shall be shown in the accounting records of the Company, and any
adjustments thereto, including any reduction, readjustment, and restoration of
Ownership Interests under Sections 10.5, 10.6 and 11.5,
shall be made monthly.  The Schedule of Members attached hereto shall
be amended from time to time to reflect such changes.

      

      4.5           Distributions to
Members.  All Net Cash Flow shall be distributed as determined
by the Management Committee among the Members in accordance with their Ownership
Interests. The distribution of cash from the sale of material assets, a material
refinancing, transactions not in the ordinary course of business, or from
dissolution will be determined by the unanimous consent of the
Members.

      

      ARTICLE
V

      RELATIONSHIP
OF THE MEMBERS

      

      5.1           Limitation on Authority of
Members. No Member is an agent of the Company solely by virtue of being a
Member, and no Member has authority to act for the Company solely by virtue of
being a Member.  This Section 5.1 supersedes any
authority granted to the Members pursuant to the Act.  Any Member that
takes any action or binds the Company in violation of this Section 5.1 shall be solely
responsible for any loss and expense incurred by the Company as a result of the
unauthorized action and shall indemnify and hold the Company harmless with
respect to the loss or expense.

      
        
           

        

        
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      5.2           Federal Tax Elections and
Allocations. The Company shall be treated as a partnership for federal
income tax purposes, and no Member shall take any action to alter such
treatment.

      

      5.3           State Income Tax. To the
extent permissible under applicable law, the relationship of the Members shall
be treated for state income tax purposes in the same manner as it is for federal
income tax purposes.

      

      5.4           Tax Returns. After approval of
the Management Committee, any tax returns or other required tax forms shall be
filed in accordance with Exhibit C.

      

      5.5           Other Business Opportunities.
Each Member shall have the right to engage in and receive full benefits from any
independent business activities or operations, whether or not competitive with
the Company, without consulting with, or obligation to, the other Member or the
Company. The doctrines of “corporate opportunity” or “business opportunity”
shall not be applied to the Business nor to any other activity or operation of
any Member. No Member shall have any obligation to the Company or any other
Member with respect to any opportunity to acquire any property outside the Area
of Interest at any time, or within the Area of Interest after the termination of
the Company.  Unless otherwise agreed in writing, neither the Manager
nor any Member shall have any obligation to mill, beneficiate or otherwise treat
any Products in any facility owned or controlled by the Manager or such
Member.

      

      5.6           Waiver of Rights to Partition or
Other Division of Properties and Assets. The Members hereby waive and
release all rights of partition, or of sale in lieu thereof, or other division
of the Properties and Assets, including any such rights provided by
Law.

      

      5.7           Bankruptcy of a Member. A
Member shall cease to have any power as a Member or Manager or any voting rights
or rights of approval hereunder upon bankruptcy, insolvency, dissolution or
assignment for the benefit of creditors of such Member, and its successor upon
the occurrence of any such event shall have only the rights, powers and
privileges of a transferee enumerated in Section 7.2, and shall be
liable for all obligations of the Member under this Agreement. In no event,
however, shall a personal representative or successor become a substitute Member
unless the requirements of Section 7.2 are
satisfied.

      

      5.8           Implied Covenants. There are
no implied covenants contained in this Agreement other than those of good faith
and fair dealing.

      

      5.9           Certificate of Ownership
Interest.

      

      (a)           Certificate.  The Ownership
Interests shall be represented by a certificate of membership, such certificate
constituting a “security” for purposes of Article 8 of the Uniform Commercial
Code.  The exact contents of a certificate of membership may be determined
by action of the Manager but will be issued substantially in conformity with the
following requirements.  The certificates of membership will be
respectively numbered serially, as they are issued, and will be signed by the
Manager or authorized officer of the Company.  Each certificate of
membership will state the name of the Company, the fact that the Company is
organized under the laws of the State of Nevada as
a limited liability company, the name of the Member to whom issued, the date of
issue and the Ownership Interests represented thereby.   Each
certificate of membership will be otherwise in such form as may be determined by
the Manager.  The initial units representing the Ownership Interests shall
consist of 1,000 units, with 700 units being issued to Scorpio US and 300 units
being issued to Golden Phoenix, respectively.

      
        
           

        

        
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      (b)           Cancellation
of Certificate.  All certificates of
membership surrendered to the Company for transfer will be cancelled and no new
certificates of membership will be issued in lieu thereof until the former
certificates for a like number of Ownership Interests will have been surrendered
and cancelled, except as herein provided with respect to lost, stolen, or
destroyed certificates.

      

      (c)           Replacement
of Lost, Stolen, or Destroyed Certificate.  Any Member claiming
that its certificate of membership is lost, stolen, or destroyed may make an
affidavit or affirmation of that fact and request a new certificate.  Upon
the giving of a satisfactory indemnity to the Company as reasonably required by
the Manager, a new certificate may be issued of the same tenor and representing
the same Ownership Interest as was represented by the certificate alleged to be
lost, stolen, or destroyed.

      

      5.10         Disposition of Production.
Neither Member shall have any obligation to account to the other Member for, nor
have any interest or right of participation in any profits or proceeds nor have
any obligation to share in any losses from, futures contracts, forward sales,
trading in puts, calls, options or any similar hedging, price protection or
marketing mechanism employed by a Member with respect to its proportionate share
of any Products produced or to be produced from the Properties.

      

      5.11         Limitation of Liability. The
Members shall not be required to make any contribution to the capital of the
Company except as otherwise provided in this Agreement, nor shall the Members in
their capacity as Members or Manager be bound by, or liable for, any debt,
liability or obligation of the Company whether arising in contract, tort, or
otherwise, except as expressly provided by this Agreement. The Members shall be
under no obligation to restore a deficit Capital Account upon the dissolution of
the Company or the liquidation of any of their Ownership Interests.

      

      5.12         Indemnities.  The
Company may, and shall have the power to, indemnify and hold harmless any Member
or Manager or other person from and against any and all claims and demands
whatsoever arising from or related to the Business, the Company or a Member’s
membership in the Company.

      

      5.13         No Third Party Beneficiary
Rights. This Agreement shall be construed to benefit the Members and
their respective successors and assigns only, and shall not be construed to
create third party beneficiary rights in any other party or in any governmental
organization or agency.

      
        
           

        

        
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      ARTICLE
VI

      REPRESENTATIONS
AND WARRANTIES

      

      As of the
Effective Date, each Member warrants and represents to the other
that:

      

      (a)           it
is a corporation or other entity duly organized and in good standing in its
jurisdiction of formation and is qualified to do business and is in good
standing in those jurisdictions where necessary in order to carry out the
purposes of this Agreement;

      

      (b)           it
has the capacity to enter into and perform this Agreement and all transactions
contemplated herein and that all corporate, board of directors, shareholder,
surface and mineral rights owner, lessor, lessee and other actions and consents
required to authorize it to enter into and perform this Agreement have been
properly taken or obtained;

      

      (c)           it
will not breach any other agreement or arrangement by entering into or
performing this Agreement;

      

      (d)           it
is not subject to any governmental order, judgment, decree, debarment, sanction
or Laws that would preclude the permitting or implementation of Operations under
this Agreement; and

      

      (e)           this
Agreement has been duly executed and delivered by it and is valid and binding
upon it in accordance with its terms.

      

      ARTICLE
VII

      TRANSFER
OF INTEREST; PREEMPTIVE RIGHT

      

      7.1           General. A Member shall have
the right to Transfer to a third party its Ownership Interest, or any beneficial
interest therein, solely as provided in this Article
VII.  Notwithstanding anything herein to the contrary, the
parties hereto acknowledge that GPXM’s Ownership Interest constitutes collateral
under that certain First Amended and Restated Security Agreement by and between
GPXM and Crestview Capital Master, LLC (”Crestview”), dated February 6, 2009,
and hereby consent to such Encumbrance, subject to Crestview’s confirmation,
pursuant to that certain Letter Agreement dated as of even date hereof between
Crestview, GPXM and Scorpio US, in substantially the form attached hereto as
Exhibit H, confirming,
among other things, that any sale of GPXM’s Ownership Interest upon a default
shall be conducted in accordance with  Subsection 7.2(g)(ii)
below.

      

      7.2           Limitations on Free
Transferability. Any Transfer by either Member under  Section 7.1 shall be subject
to the following limitations:

      

      (a)           Neither
Member shall Transfer any beneficial interest in the Company (including, but not
limited to, any royalty, profits, or other interest in the Products) except in
conjunction with the Transfer of part or all of its Ownership
Interest;

      
        
           

        

        
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      (b)           No
transferee of all or any part of a Member’s Ownership Interest shall have the
rights of a Member unless and until the transferring Member has provided to the
other Member notice of the Transfer, and, except as provided in Subsections 7.2(f) and
7.2(g), the transferee,
as of the effective date of the Transfer, has committed in writing to assume and
be bound by this Agreement to the same extent as the transferring
Member;

      

      (c)           Neither
Member, without the consent of the other Member, shall make a Transfer that
shall violate any Law, or result in the cancellation of any permits, licenses,
or other similar authorization;

      

      (d)           No
Transfer permitted by this Article shall relieve the transferring Member of any
liability of such transferring Member under this Agreement, whether accruing
before or after such Transfer;

      

      (e)           Any
Member that makes a Transfer that shall cause termination of the tax partnership
established by Section
5.2 shall indemnify the other Member for, from and against any and all
loss, cost, expense, damage, liability or claim therefore arising from the
Transfer, including without limitation any increase in taxes, interest and
penalties or decrease in credits caused by such termination and any tax on
indemnification proceeds received by the indemnified Member.

      

      (f)         
  In the event of a Transfer of less than all of an Ownership
Interest, the transferring Member and its transferee shall act and be treated as
one Member under this Agreement; provided however, that in
order for such Transfer to be effective, the transferring Member and its
transferee must first:

      

      (i)           agree,
as between themselves, that one of them is authorized to act as the sole agent
(“Agent”) on their
behalf with respect to all matters pertaining to this Agreement and the Company;
and

      

      (ii)          notify
the other Member of the designation of the Agent, and in such notice warrant and
represent to the other Member that:

      

      (A)           the
Agent has the sole authority to act on behalf of, and to bind, the transferring
Member and its transferee with respect to all matters pertaining to this
Agreement and the Company;

      

      (B)           the
other Member may rely on all decisions of, notices and other communications
from, and failures to respond by, the Agent, as if given (or not given) by the
transferring Member and its transferee; and

      

      (C)           all
decisions of, notices and other communications from, and failures to respond by,
the other Member to the Agent shall be deemed to have been given (or not given)
to the transferring Member and its transferee.

      
        
           

        

        
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      The
transferring Member and its transferee may change the Agent (but such
replacement must be one of them) by giving notice to the other Member, which
notice must conform to Subsection 7.2(f)(ii).

      

      (g)           If
the Transfer is the grant of an Encumbrance on an Ownership Interest to secure a
loan or other indebtedness of either Member in a bona fide transaction, other
than a transaction approved unanimously by the Management Committee or Project
Financing  approved by the Management Committee, such Encumbrance
shall be granted only in connection with such Member’s financing payment or
performance of that Member’s obligations under this Agreement and shall be
subject to the terms of this Agreement and the rights and interests of the other
Member hereunder. Any such Encumbrance shall be further subject to the condition
that the holder of such Encumbrance (“Chargee”) first enters into a
written agreement with the other Member in form satisfactory to the other
Member, acting reasonably, binding upon the Chargee, to the effect
that:

      

      (i)           the
Chargee shall not enter into possession or institute any proceedings for
foreclosure or partition of the encumbering Member’s Ownership Interest and that
such Encumbrance shall be subject to the provisions of this
Agreement;

      

      (ii)          the
Chargee’s remedies under the Encumbrance shall be limited to the sale of the
whole (but only of the whole) of the encumbering Member’s Ownership Interest to
the other Member, or, failing such a sale, at a public auction to be held at
least fifteen (15) days after prior notice to the other Member, such sale to be
subject to the purchaser entering into a written agreement with the other Member
whereby such purchaser assumes all obligations of the encumbering Member under
the terms of this Agreement.  The price of any preemptive sale to the
other Member shall be the remaining principal amount of the loan plus accrued
interest and related expenses, and such preemptive sale shall occur within sixty
(60) days of the Chargee’s notice to the other Member of its intent to sell the
encumbering Member’s Ownership Interest. Failure of a sale to the other Member
to close by the end of such period, unless failure is caused by the encumbering
Member or by the Chargee, shall permit the Chargee to sell the encumbering
Member’s Ownership Interest at a public sale; and

      

      (iii)         the
charge shall be subordinate to any then-existing debt, including Project
Financing previously approved by the Management Committee, encumbering the
transferring Member’s Ownership Interest.

      

      7.3           Preemptive Right. Any Transfer
by either Member under Section 7.1, excluding
those Transfers in compliance with Subsection 7.2(g), and any
Transfer by an Affiliate in Control of either Member shall be subject to a
preemptive right of the other Member to the extent provided in Exhibit F.  Failure
of a Member’s Affiliate to comply with this Section and Exhibit F shall be a
breach by such Member of this Agreement.

      
        
           

        

        
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      ARTICLE
VIII

      MANAGEMENT
COMMITTEE

      

      8.1           Organization and Composition.
The Members hereby establish a Management Committee to determine overall
policies, objectives, procedures, methods and actions under this
Agreement.  The Management Committee shall consist of five (5)
member(s), with three (3) members appointed by Scorpio US and two (2) member(s)
appointed by GPXM.  Each Member may appoint one or more alternates to
act in the absence of a regular member. Any alternate so acting shall be deemed
a Member.  Appointments by a Member shall be made or changed by notice
to the other Members.  Scorpio US shall designate one of its Members
to serve as the chair of the Management Committee.

      

      8.2           Decisions. In all matters in
which a vote, approval or consent of the Management Committee is required by
this Agreement, the LLC Agreement or by law, a vote, consent or approval of a
majority of the Members of the Management Committee shall be required to
authorize or approve such act.

      

      8.3           Meetings.

      

      (a)           The
Management Committee shall hold regular meetings at least quarterly in Nevada,
or at other agreed places.  The Manager shall give five (5) days
notice to the Members of such meetings. Additionally, either Member may call a
special meeting upon seven (7) days notice to the other Member.  In
case of an emergency, reasonable notice of a special meeting shall
suffice.  There shall be a quorum if at least one member of the
Management Committee representing each Member is present; provided, however, that if a
Member fails to attend two consecutive properly called meetings, then a quorum
shall exist at the second meeting if the other Member is represented by at least
one appointed member, and a vote of such Member shall be considered the vote
required for the purposes of the conduct of all business properly noticed even
if such vote would otherwise require unanimity.

      

      (b)           If
business cannot be conducted at a regular or special meeting due to the lack of
a quorum, either Member may call the next meeting upon two (2) days notice to
the other Member.

      

      (c)           Each
notice of a meeting shall include an itemized agenda prepared by the Manager in
the case of a regular meeting or by the Member calling the meeting in the case
of a special meeting, but any matters may be considered if either Member adds
the matter to the agenda  at least two (2) days before the meeting or
with the consent of the other Member.   The Manager shall prepare
minutes of all meetings and shall distribute copies of such minutes to the other
Member within ten (10) days after the meeting.  Either Member may
electronically record the proceedings of a meeting with the consent of the other
Member.  The other Member shall sign and return or object to the
minutes prepared by the Manager within thirty (30) days after receipt, and
failure to do either shall be deemed acceptance of the minutes as prepared by
the Manager.  The minutes, when signed or deemed accepted by both
Members, shall be the official record of the decisions made by the Management
Committee.  Decisions made at a Management Committee meeting shall be
implemented in accordance with adopted Programs and Budgets.  If a
Member timely objects to minutes
proposed by the Manager, the members of the Management Committee shall seek, for
a period not to exceed thirty (30) days from receipt by the Manager of notice of
the objections, to agree upon minutes acceptable to both Members.  If
the Management Committee does not reach agreement on the minutes of the meeting
within such thirty (30) day period, the minutes of the meeting as prepared by
the Manager together with the other Member’s proposed changes shall collectively
constitute the record of the meeting.  If personnel employed in
Operations are required to attend a Management Committee meeting, reasonable
costs incurred in connection with such attendance shall be charged to the
Business Account.  All other costs shall be paid by the Members
individually.

      
        
           

        

        
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      8.4           Action Without Meeting in
Person. In lieu of meetings in person, the Management Committee may
conduct meetings by telephone or video conference, so long as minutes of such
meetings are prepared in accordance with Subsection 8.3(c). The
Management Committee may also take actions in writing signed by all members of
the Management Committee.

      

      8.5           Matters Requiring Approval.
Except as otherwise delegated to the Manager in Section 9.2, the Management
Committee shall have exclusive authority to determine all matters related to
overall policies, objectives, procedures, methods and actions under this
Agreement. Notwithstanding anything herein to the contrary, the following
actions shall require the prior written approval of both Members: (i) any merger
or acquisition whereby the Company acquires or merges with or into an
independent third party; (ii) any debt or royalty financing encumbering the
Properties or Assets other than  encumbrances on Assets in the
ordinary course of business and not exceeding $100,000 in aggregate; (iii) any
determination to enter into a Supplemental Business Arrangement pursuant to
Section 10.9; (iv) any
dissolution pursuant to Subsection 14.1(b); (v) if the
subsequent year’s cost of Programs and Budgets exceed by more than thirty-five
percent (35%) the current year’s cost of Programs and Budgets; or (vi) any
modification to this Agreement pursuant to Section 16.6.

      

      ARTICLE
IX

      MANAGER

      

      9.1           Appointment. The Members
hereby appoint Scorpio US as the Manager with overall management responsibility
for Operations.  Scorpio US hereby agrees to serve until it resigns as
provided in Section
9.4.

      

      9.2           Powers and Duties of Manager.
Subject to the terms and provisions of this Agreement, the Manager shall have
the following powers and duties, which shall be discharged in accordance with
adopted Programs and Budgets.

      

      (a)           The
Manager shall manage, direct and control Operations, and shall prepare and
present to the Management Committee proposed Programs and Budgets as provided in
Article X.

      

      (b)           The
Manager shall implement the decisions of the Management Committee, shall make
all expenditures necessary to carry out adopted Programs, and shall promptly
advise the Management
Committee if it lacks sufficient funds to carry out its responsibilities under
this Agreement.

      
        
           

        

        
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      (c)           The
Manager shall use reasonable efforts to: (i) purchase or otherwise acquire
all material, supplies, equipment, water, utility and transportation services
required for Operations, such purchases and acquisitions to be made to the
extent reasonably possible on the best terms available, taking into account all
of the circumstances; (ii) obtain such customary warranties and guarantees
as are available in connection with such purchases and acquisitions; and
(iii) keep the Properties and Assets free and clear of all Encumbrances,
except any such Encumbrances listed in Paragraph 1.1 of Exhibit A and those existing
at the time of, or created concurrent with, the acquisition of such Properties
and Assets, or mechanic’s or materialmen’s liens (which shall be contested,
released or discharged in a diligent matter) or Encumbrances specifically
approved by the Management Committee.

      

      (d)           The
Manager shall conduct such title examinations of the Properties and cure such
title defects pertaining to the Properties as may be advisable in its reasonable
judgment.

      

      (e)           The
Manager shall: (i) make or arrange for all payments required by leases,
licenses, permits, contracts and other agreements related to the Properties and
Assets; (ii) pay all taxes, assessments and like charges on Operations,
Properties and Assets except taxes determined or measured by a Member’s sales
revenue or net income and taxes, including production taxes, attributable to a
Member’s share of Products, and shall otherwise promptly pay and discharge
expenses incurred in Operations; provided, however, that if
authorized by the Management Committee, the Manager shall have the right to
contest (in the courts or otherwise) the validity or amount of any taxes,
assessments or charges if the Manager deems them to be unlawful, unjust, unequal
or excessive, or to undertake such other steps or proceedings as the Manager may
deem reasonably necessary to secure a cancellation, reduction, readjustment or
equalization thereof before the Manager shall be required to pay them, but in no
event shall the Manager permit or allow title to the Properties and Assets to be
lost as the result of the nonpayment of any taxes, assessments or like charges;
and (iii) do all other acts reasonably necessary to maintain the Properties
and Assets.

      

      (f)           The
Manager shall: (i) apply for all necessary permits, licenses and approvals;
(ii) comply with all Laws; (iii) notify promptly the Management
Committee of any allegations of substantial violation thereof; and
(iv) prepare and file all reports or notices required for or as a result of
Operations. The Manager shall not be in breach of this provision if a violation
has occurred in spite of the Manager’s good faith efforts to comply consistent
with its standard of care under Section 9.3.  In
the event of any such violation, the Manager shall timely cure or dispose of
such violation on behalf of both Members through performance, payment of fines
and penalties, or both, and the cost thereof shall be charged to the Business
Account.

      

      (g)           The
Manager shall prosecute and defend, but shall not initiate without consent of
the Management Committee, all litigation or administrative proceedings arising
out of Operations. The non-managing Member shall have the right to participate,
at its own expense, in such litigation or administrative
proceedings.  The non-managing Member shall approve in advance any
settlement involving payments, commitments or obliga­tions in excess of One
Hundred Thousand Dollars ($100,000) in cash or value, such approval not to be
unreasonably withheld.

      
        
           

        

        
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      (h)           The
Manager shall obtain insurance for the benefit of the Company as provided in
Exhibit E or as may
otherwise be determined from time to time by the Management
Committee.

      

      (i)      
     The Manager may dispose of the Properties and
Assets, whether by abandonment, surrender, or Transfer in the ordinary course of
business, except that Properties may be abandoned or surrendered only as
provided in Section 12.2.  Without
prior authorization from the Management Committee, however, the Manager shall
not: (i) dispose of Assets in any one transaction (or in any series of
related transactions) having a value in excess of One Hundred Thousand Dollars
($100,000); (ii) enter into any sales contracts or commitments for Product,
except as permitted in Section
5.10; (iii) begin a liquidation of the Company; or (iv) dispose
of all or a substantial part of the Properties and Assets necessary to achieve
the purposes of the Company.

      

      (j)      
     The Manager shall have the right to carry out its
responsibilities hereunder through agents, Affiliates or independent
contractors.

      

      (k)           The
Manager shall perform or cause to be performed all assessment and other work,
and shall pay all Governmental Fees, required by Law in order to maintain the
unpatented mining claims, mill sites and tunnel sites included within the
Properties.  The Manager shall have the right to perform the
assessment work required hereunder pursuant to a common plan of exploration and
continued actual occupancy of such claims and sites shall not be
required.  The Manager shall not be liable on account of any
determination by any court or governmental agency that the work performed by the
Manager does not constitute the required annual assessment work or occupancy for
the purposes of preserving or maintaining ownership of the claims, provided that
the work done is pursuant to an adopted Program and Budget and is performed in
accordance with the Manager’s standard of care under Section 9.3.  The
Manager shall timely record with the appropriate county and file with the
appropriate United States agency any required affidavits, notices of intent to
hold and other documents in proper form attesting to the payment of Governmental
Fees, the performance of assessment work or intent to hold the claims and sites,
in each case in sufficient detail to reflect compliance with the requirements
applicable to each claim and site.  The Manager shall not be liable on
account of any determination by any court or governmental agency that any such
document submitted by the Manager does not comply with applicable requirements,
provided that such document is prepared and recorded or filed in accordance with
the Manager’s standard of care under Section 9.3.

      

      (l)     
      If authorized by the Management Committee,
the Manager may: (i) locate, amend or relocate any unpatented mining claim
or mill site or tunnel site, (ii) locate any fractions resulting from such
amendment or relocation, (iii) apply for patents or mining leases or other
forms of mineral tenure for any such unpatented claims or sites,
(iv) abandon any unpatented mining claims for the purpose of locating mill
sites or otherwise acquiring from the United States rights to the ground covered
thereby, (v) abandon any unpatented mill sites for the purpose of locating
mining claims or otherwise acquiring from the United States rights to the ground
covered thereby, (vi) exchange with or convey to the United States any of
the Properties for the purpose of acquiring rights to the ground covered thereby
or other adjacent ground, and (vii) convert any unpatented claims or
mill sites into one or more leases or other forms of mineral tenure pursuant to
any Law hereafter enacted.

      
        
           

        

        
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      (m)           The
Manager shall keep and maintain all required accounting and financial records
pursuant to the procedures described in Exhibit B and in
accordance with customary cost accounting practices in the mining industry, and
shall ensure appropriate separation of accounts unless otherwise agreed by the
Members.

      

      (n)           The
Manager shall keep and maintain all required records, make elections, and
prepare and file all federal and state tax returns or other required tax forms,
and perform the other duties described in Exhibit C.

      

      (o)           The
Manager shall maintain Equity Accounts for each Member. Each Member’s Equity
Account shall be credited with the value of such Member’s contributions under
Subsections 3.1(a) and
3.1(b) and shall be credited with any additional amounts contributed by
such Member to the Company.  Each Member’s Equity Account shall be
charged with the cash and the fair market value of property distributed to such
Member (net of liabilities assumed by such Member and liabilities to which such
distributed property is subject).  Contributions and distributions
shall include all cash contributions or distributions plus the agreed value
(expressed in dollars) of all in-kind contributions or
distributions.  Solely for purposes of determining the Equity Account
balances of the Members, the Manager shall reasonably estimate the fair market
value of all Products distributed to the Members, and such estimated value shall
be used regardless of the actual amount received by each Member upon disposition
of such Products.

      

      (p)           The
Manager shall keep the Management Committee advised of all Operations by
submitting in writing to the members of the Management Committee:
(i) monthly progress reports that include statements of expenditures and
comparisons of such expenditures to the adopted Budget; (ii) periodic
summaries of data acquired; (iii) copies of reports concerning Operations;
(iv) a detailed final report within five (5) days after completion of each
Program and Budget, which shall include comparisons between actual and budgeted
expenditures and comparisons between the objectives and results of Programs; and
(v) such other reports as any member of the Management Committee may
reasonably request.  Subject to Article XIII, at all
reasonable times the Manager shall provide the Management Committee, or other
representative of a Member upon the request of such Member’s member of the
Management Committee, access to, and the right to inspect and, at such Member’s
cost and expense, copy the Existing Data and all maps, drill logs and other
drilling data, core, pulps, reports, surveys, assays, analyses, production
reports, operations, technical, accounting and financial records, and other
Business Information, to the extent preserved or kept by the
Manager.  In addition, the Manager shall allow the non-managing
Member, at the latter’s sole risk, cost and expense, and subject to reasonable
safety regulations, to inspect the Properties, Assets and Operations at all
reasonable times, so long as the non-managing Member does not unreasonably
interfere with Operations.

      

      (q)           The
Manager shall prepare an Environmental Compliance plan for all Operations
consistent with the requirements of any applicable Laws or contractual
obligations and shall include in each Program and Budget sufficient funding to
implement the Environmental Compliance plan and to satisfy the financial
assurance requirements of any applicable Law or contractual
obligation pertaining to Environmental Compliance. To the extent practical, the
Environmental Compliance plan shall incorporate concurrent reclamation of
Properties disturbed by Operations.

      
        
           

        

        
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      (r)     
      The Manager shall undertake to perform
Continuing Obligations when and as economic and appropriate, whether before or
after termination of the Company. The Manager shall have the right to delegate
performance of Continuing Obligations to persons having demonstrated skill and
experience in relevant disciplines. As part of each Program and Budget
submittal, the Manager shall specify in such Program and Budget the measures to
be taken for performance of Continuing Obligations and the cost of such
measures. The Manager shall keep the other Member reasonably informed about the
Manager’s efforts to discharge Continuing Obligations.  Authorized
representatives of each Member shall have the right from time to time to enter
the Properties to inspect work directed toward satisfaction of Continuing
Obligations and audit books, records, and accounts related thereto.

      

      (s)           The
funds that are to be deposited into the Environmental Compliance Fund shall be
maintained by the Manager in a separate, interest bearing cash management
account, which may include, but is not limited to, money market investments and
money market funds, and/or in longer term investments if approved by the
Management Committee.  Such funds shall be used solely for
Environmental Compliance and Continuing Obligations, including the committing of
such funds, interests in property, insurance or bond policies, or other security
to satisfy Laws regarding financial assurance for the reclamation or restoration
of the Properties, and for other Environmental Compliance
requirements.

      

      (t)   
        If Ownership Interests are
adjusted in accordance with this Agreement the Manager shall modify the Schedule
of Members to properly reflect such adjustment and shall propose from time to
time one or more methods for fairly allocating costs for Continuing
Obligations.

      

      (u)           The
Manager shall undertake all other activities reasonably necessary to fulfill the
foregoing, and to implement the policies, objectives, procedures, methods and
actions determined by the Management Committee pursuant to Section 8.1.

      

      9.3           Standard of Care. The Manager
shall discharge its duties under Section 9.2 and conduct
all Operations in a good, workmanlike and efficient manner, in accordance with
sound mining and other applicable industry standards and practices, and in
accordance with Laws and with the terms and provisions of leases, licenses,
permits, contracts and other agreements pertaining to the Properties and
Assets.  The Manager shall not be liable to the other Member for any
act or omission resulting in damage or loss except to the extent caused by or
attributable to the Manager’s willful misconduct or gross
negligence.  The Manager shall not be in default of any of its duties
under Section 9.2 if its
inability or failure to perform results from the failure of the other Member to
perform acts or to contribute amounts required of it by this
Agreement.

      

      9.4           Resignation; Deemed Offer to
Resign. The Manager may resign upon not less than three (3) months’ prior
notice to the other Member, in which case the other Member may elect to become
the new Manager by notice to the resigning Member within fifteen (15) days after
the notice of
resignation. If any of the following shall occur, the Manager shall be deemed to
have resigned upon the occurrence of the event described in each of the
following Subsections, with the successor Manager to be appointed by the other
Member at a subsequently called meeting of the Management Committee, at which
the Manager shall not be entitled to vote.  The other Member may
appoint itself or a third party as the Manager.

      
        
           

        

        
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      (a)           The
aggregate Ownership Interest of the Manager and its Affiliates becomes less than
fifty percent (50%);

      

      (b)           The
Manager fails to perform a material obligation imposed upon it under this
Agreement and such failure continues for a period of sixty (60) days after
notice from the other Member demanding performance;

      

      (c)           The
Manager fails to pay or contest in good faith Company bills and Company debts as
such obligations become due and such failure continues for a period of sixty
(60) days after notice from the other Member demanding performance;

      

      (d)           A
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for a substantial part of its assets is appointed and such appointment
is neither made ineffective nor discharged within sixty (60) days after the
making thereof, or such appointment is consented to, requested by, or acquiesced
to by the Manager;

      

      (e)           The
Manager commences a voluntary case under any applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or consents to the entry of an order
for relief in an involuntary case under any such law or to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar official of any substantial part of its assets; or
makes a general assignment for the benefit of creditors; or takes corporate or
other action in furtherance of any of the foregoing; or

      

      (f)     
      Entry is made against the Manager of a
judgment, decree or order for relief affecting its ability to serve as Manager
or a substantial part of its Ownership Interest or its other assets by a court
of competent jurisdiction in an involuntary case commenced under any applicable
bankruptcy, insolvency or other similar law of any jurisdiction now or hereafter
in effect.

      

      Under
Subsections (d),
(e) or (f) above, the appointment of a successor Manager shall
be deemed to pre-date the event causing a deemed resignation.

      

      9.5           Payments To Manager. The
Manager shall be compensated for its services and reimbursed for its costs
hereunder in accordance with Exhibit B.

      

      9.6           Transactions With Affiliates.
If the Manager engages Affiliates to provide services hereunder, it shall do so
on terms no less favorable than would be the case in arm’s-length transactions
with unrelated parties.

      

      9.7           Activities During Deadlock. If
the Management Committee for any reason fails to adopt an Exploration,
Pre-Feasibility Study, Feasibility Study or Development Program and Budget,
the
Manager shall continue Operations at levels sufficient to maintain the
Properties.  If the Management Committee for any reason fails to adopt
an initial Mining Program and Budget or any Expansion or Modification Programs
and Budgets, the Manager shall continue Operations at levels sufficient to
maintain the then current Operations and Properties. If the Management Committee
for any reason fails to adopt Mining Programs and Budgets subsequent to the
initial Mining Program and Budget, subject to the contrary direction of the
Management Committee and receipt of necessary funds, the Manager shall continue
Operations at levels comparable with the last adopted Mining Program and Budget.
All of the foregoing shall be subject to the contrary direction of the
Management Committee and the receipt of necessary funds.

      
        
           

        

        
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      ARTICLE
X

      PROGRAMS
AND BUDGETS

      

      10.1         Initial Program and Budget.
The Initial Program and Budget will be prepared by the Manager with reference to
the Feasibility Study to be prepared by Micon International Limited, and will be
submitted to the Members in accordance with Section 10.4.

      

      10.2         Operations Pursuant to Programs and
Budgets. Except as otherwise provided in Section 10.8, Operations shall
be conducted, expenses shall be incurred, and Properties and Assets shall be
acquired only pursuant to adopted Programs and Budgets.  Every Program
and Budget adopted pursuant to this Agreement shall provide for accrual of
reasonably anticipated Environmental Compliance expenses for all Operations
contemplated under the Program and Budget.

      

      10.3         Presentation of Programs and
Budgets. Proposed Programs and Budgets shall be prepared by the Manager
(except that in the event the Manager makes an election under Subsection 10.5(a)(ii) or
(iii), in which case the other Member shall have the right to prepare a
Proposed Program and Budget) for a period of one (1) year or any other period as
approved by the Management Committee, which shall be submitted to the Management
Committee for review and consideration.  All proposed Programs and
Budgets may include Exploration, Pre-Feasibility Studies, Feasibility Study,
Development, Mining and Expansion or Modification Operations components, or any
combination thereof, and shall be reviewed and adopted upon a vote of the
Management Committee in accordance with Sections 8.2 and
10.4.  Each Program and Budget adopted by the Management
Committee, regardless of length, shall be reviewed at least once a year at a
meeting of the Management Committee.  During the period encompassed by
any Program and Budget, and at least three (3) months prior to its expiration, a
proposed Program and Budget for the succeeding period shall be prepared by the
Manager and submitted to the Management Committee for review and
consideration.

      

      10.4         Review and Adoption of Proposed
Programs and Budgets. Within fifteen (15) days after submission of a
proposed Program and Budget, each Member shall submit in writing to the
Management Committee:

      

      (a)           Notice
that the Member approves any or all of the components of the proposed Program
and Budget; or

      
        
           

        

        
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      (b)           Modifications
proposed by the Member to the components of the proposed Program and Budget;
or

      

      (c)           Notice
that the Member rejects any or all of the components of the proposed Program and
Budget.

      

      If a
Member fails to give any of the foregoing responses within the allotted time,
the failure shall be deemed to be a vote by the Member for adoption of the
Manager’s proposed Program and Budget.  If a Member makes a timely
submission to the Management Committee pursuant to Subsections 10.4(a), (b) or
(c), then the Manager working with the other Member shall seek for a
period of time not to exceed twenty (20) days to develop a complete Program and
Budget acceptable to both Members. The Manager shall then call a Management
Committee meeting in accordance with Section 8.3 for purposes of
reviewing and voting upon the proposed Program and Budget.

      

      10.5         Election
to Participate.

      

      (a)           By
notice to the Management Committee within twenty (20) days after the final vote
adopting a Program and Budget, and notwithstanding its vote concerning adoption
of a Program and Budget, a Member may elect to participate in the approved
Program and Budget: (i) in proportion to its respective Ownership Interest,
(ii) in some lesser amount than its respective Ownership Interest, or
(iii) not at all. In case of an election under Subsection 10.5(a)(ii)
or (iii), its
Ownership Interest shall be recalculated as provided in Subsection 10.5(b) below,
with dilution effective as of the first day of the Program Period for the
adopted Program and Budget.  If a Member fails to so notify the
Management Committee of the extent to which it elects to participate, the Member
shall be deemed to have elected to contribute to such Program and Budget in
proportion to its respective Ownership Interest as of the beginning of the
Program Period.

      

      (b)           If
a Member elects to contribute to an adopted Program and Budget some lesser
amount than in proportion to its respective Ownership Interest, or not at all,
and the other Member elects to fund all or any portion of the deficiency, the
Ownership Interest of the Reduced Member shall be provisionally recalculated as
follows:

      

      (i)           for
an election made before Payout, by dividing: (A) the sum of (1) the
amount credited to the Reduced Member’s Equity Account with respect to its
Initial Contribution under Section 3.1, (2) the
total of all of the Reduced Member’s contributions to the Company under Subsection 10.5(a) or
otherwise pursuant to this Agreement, and (3) the amount, if any, the
Reduced Member elects to contribute to the adopted current Program and Budget;
by (B) the sum of (1), (2) and (3) above for both Members; and then
multiplying the result by one hundred; or

      

      (ii)          for
an election made after Payout, by reducing its Ownership Interest in an amount
equal to one times the amount by which it would have been reduced under Subsection 10.5(b)(i) if such
election were made before Payout; and 

      

      (iii)         subject
to Subsection 4.2(c)(iii),
in no event shall GPXM’s Ownership Interest be reduced to less than
twenty percent (20%) at any time prior to commencement of Commercial Production
(except in the event of an adjustment under Subsection 4.2(c)(ii), in
which case, in
no event shall GPXM’s Ownership Interest be reduced to less than its then
existing Ownership Interest prior to commencement of Commercial Production
during the 12 month extension period referenced therein), with no further
dilution under this Subsection
10.5(b) until Commercial Production is achieved, despite its election not
to contribute to a Program and Budget.

      
        
           

        

        
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      The
Ownership Interest of the other Member shall be increased by the amount of the
reduction in the Ownership Interest of the Reduced Member, and if the other
Member elects not to fund the entire deficiency, the Manager shall adjust the
Program and Budget to reflect the funds available.

      

      (c)           Whenever
the Ownership Interests are recalculated pursuant to this Section, (i) the
Equity Accounts of both Members shall be revised to bear the same ratio to each
other as their recalculated Ownership Interests; (ii) the Schedule of
Members shall be amended to reflect the recalculated Ownership Interests; and
(iii) the portion of Capital Account attributable to the reduced Ownership
Interest of the Reduced Member shall be transferred to the other
Member.

      

      
         Recalculation or Restoration of
Reduced Interest Based on Actual Expenditures.

      

      

      (a)           If
a Member makes an election under Subsection 10.5(a)(ii)
or (iii), then
within ninety (90) days after the conclusion of such Program and Budget, the
Manager shall report the total amount of money expended plus the total
obligations incurred by the Manager for such Budget.

      

      (b)           If
the Manager expended or incurred obligations that were more or less than the
adopted Budget, the Ownership Interests shall be recalculated pursuant to Subsection 10.5(b) by
substituting each Member’s actual contribution to the adopted Budget for that
Member’s estimated contribution at the time of the Reduced Member’s election
under Subsection 10.5(a).

      

      (c)           If
the Manager expended or incurred obligations of less than eighty percent (80%)
of the adopted Budget, within sixty (60) days of receiving the Manager’s report
on expenditures, the Reduced Member may notify the other Member of its election
to reimburse the other Member for the difference between any amount contributed
by the Reduced Member to such adopted Program and Budget and the Reduced
Member’s proportionate share (at the Reduced Member’s former Ownership Interest)
of the actual amount expended or incurred for the Program, plus interest on the
difference accruing at the rate described in Section 11.3.  The
Reduced Member shall deliver the appropriate amount (including interest) to the
other Member with such notice.  Failure of the Reduced Member to so
notify and tender such amount shall result in dilution occurring in accordance
with this Article X and
shall bar the Reduced Member from its rights under this Subsection 10.6(c) concerning
the relevant adopted Program and Budget.

      

      (d)           All
recalculations under this Section shall be effective as of the first day of the
Program Period for the Program and Budget.  The Manager, on behalf of
both Members, shall make such reimbursements, reallocations of Products,
contributions and other adjustments as are necessary so that, to the extent
possible, each Member will be placed in the position it would have been in had
its
Ownership Interests as recalculated under this Section been in effect throughout
the Program Period for such Program and Budget.

      
        
           

        

        
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      (e)           Whenever
the Ownership Interests are recalculated pursuant to this Section, (i) the
Members’ Equity Accounts shall be revised to bear the same ratio to each other
as their Recalculated Ownership Interests; (ii) the Schedule of Members
shall be amended to reflect the recalculated Ownership Interests; and (iii) the
Capital Accounts of the Members shall be determined without regard to Subsection 10.5(c), provided, that the portion of
Capital Account attributable to the reduced Ownership Interest of the Reduced
Member, if any, after taking into account the adjustments required by this Section 10.6 shall be
transferred to the other Member.

      

      10.7         Expansion or Modification Programs
and Budgets. Any Program and Budget proposed by the Manager involving
Expansion or Modification shall be based on a Feasibility Study prepared by the
Manager, Feasibility Contractors, or both, or prepared by the Manager and
audited by Feasibility Contractors, as the Management Committee
determines.  The Program and Budget, which include Expansion or
Modification, shall be submitted for review and approval by the Management
Committee within thirty (30) days following receipt by the Manager of such
Feasibility Study.

      

      10.8         Budget Overruns; Program
Changes. The Manager shall immediately notify the Management Committee of
any material departure from an adopted Program and Budget. If the Manager
exceeds an adopted Budget by more than fifteen percent (15%) in the aggregate,
then the excess over fifteen percent (15%), unless authorized or ratified by the
Management Committee, shall be for the sole account of the Manager and such
excess shall not be included in the calculations of the Ownership Interests nor
deemed a contribution under this Agreement.  Budget overruns of
fifteen  percent (15%) or less in the aggregate shall be borne by the
Members in proportion to their respec­tive Ownership Interests.

      

      10.9         Supplemental Business
Arrangement. At any time during the term of this Agreement, the
Management Committee may determine by unanimous vote of both Members that it is
appropriate to segregate the Area of Interest into areas subject to separate
Programs and Budgets for purposes of conducting further Exploration,
Pre-Feasibility or Feasibility Studies, Development, or Mining.  At
such time, the Management Committee shall designate which portion of the
Properties will comprise an area of interest under a separate business
arrangement (“Supplemental
Business Arrangement”) for the purpose of further exploring, analyzing,
developing, and mining such portion of the Properties.  The
Supplemental Business Arrangement shall substantially reflect the same terms as
this Agreement, with rights and interests of the Members in the Supplemental
Business Arrangement identical to the rights and interests of the Members in the
Company at the time of the designation, unless otherwise agreed to by the
Members, and with the Members agreeing to new Capital and Equity Accounts and
other terms necessary for the Supplemental Business Arrangement to comply with
the nature and purpose of the designation. Following the effectuation of the
Supplemental Business Arrangement, this Agreement shall terminate insofar as it
affects the Properties covered by the Supplemental Business
Arrangement.

      
        
           

        

        
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      10.10       Drilling Program. Scorpio US
covenants and agrees with GPXM to cause the Company to complete drilling
programs of a minimum of 35,000 feet of drilling per year for two years from the
date of this Agreement, at the sole expense of Scorpio US.

      

      ARTICLE
XI

      ACCOUNTS
AND SETTLEMENTS

      

      11.1         Monthly Statements. The
Manager shall promptly submit to the Management Committee monthly statements of
account reflecting in reasonable detail the charges and credits to the Business
Account during the preceding month.

      

      11.2         Cash Calls. On the basis of
each adopted Program and Budget and subject to each Member’s agreed upon
contribution to the Program and Budget based on Section 10.5 elections, the
Manager shall submit to each Member prior to the last day of each month a
billing for estimated cash requirements for the next month.  Within
ten (10) days after receipt of each billing, each Member shall advance its
proportionate share of such cash requirements.  The Manager shall
record all funds received in the Business Account. The Manager shall at all
times maintain a cash balance approximately equal to the rate of disbursement
for up to ninety (90) days.  All funds in excess of immediate cash
requirements shall be invested by the Manager for the benefit of the Company in
cash management accounts and investments selected at the discretion of the
Manager, which accounts may include, but are not limited to, money market
investments and money market funds.

      

      11.3         Failure to Meet Cash Calls. A
Member that fails to meet cash calls in the amount and at the times specified in
Section 11.2 shall be in
default, and the amounts of the defaulted cash call shall bear interest from the
date due at an annual rate equal to two (2) percentage points over the Prime
Rate, but in no event shall the rate of interest exceed the maximum permitted by
Law. Such interest shall accrue to the benefit of and be payable to the
non-defaulting Member.  In addition to any other rights and remedies
available to it by Law, the non-defaulting Member shall have those other rights,
remedies, and elections specified in Sections 11.4 and
11.5.

      

      11.4         Cover Payment. If a Member
defaults in making a contribution or cash call required by an adopted Program
and Budget, the non-defaulting Member may, but shall not be obligated to,
advance some portion or all of the amount in default on behalf of the defaulting
Member (a “Cover
Payment”). Each and every Cover Payment shall constitute a demand loan
bearing interest from the date of the advance at the rate provided in Section 11.3. If more than one
Cover Payment is made, the Cover Payments shall be aggregated and the rights and
remedies described herein pertaining to an individual Cover Payment shall apply
to the aggregated Cover Payments. The failure to repay such loan upon demand
shall be a default.

      

      11.5         Remedies. The Members
acknowledge that if either Member defaults in making a cash call or in repaying
a Cover Payment, as required under Sections 11.2, 11.3 or 11.4,
it will be difficult to measure the damages resulting from such default (it
being hereby understood and agreed that the Members have attempted to determine
such damages in advance and determined that the calculation of such damages
cannot be ascertained with reasonable certainty). Both Members acknowledge and
recognize that the damage to the non-defaulting Member could be significant. In
the event of such default, as reasonable liquidated damages, the non-defaulting
Member may, with respect
to any such default not cured within thirty (30) days after notice to the
defaulting Member of such default, elect any of the following remedies by giving
notice to the defaulting Member. Such election may be made with respect to each
failure to meet a cash call relating to a Program and Budget, regardless of the
frequency of such cash calls, provided such cash calls are made in accordance
with Section 11.2.

      
        
           

        

        
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      (a)           [RESERVED]

      

      (b)           The
non-defaulting Member may elect to have the defaulting Member’s Ownership
Interest diluted as follows:

      

      (i)           The
Reduced Member’s Ownership Interest shall be recalculated by dividing:
(X) the sum of (1) the value of the Reduced Member’s Initial
Contribution under Section 3.1, (2) the
total of all of the Reduced Member’s contributions to the Company under Subsection 10.5(a) or
otherwise pursuant to this Agreement and (3) the amount, if any, the
Reduced Member contributed to the adopted current Program and Budget with
respect to which the default occurred; by (Y) the sum of (1), (2) and (3)
above for both Members; and then multiplying the result by one
hundred.  For such a default occurring after Payout, the Reduced
Member’s Ownership Interest shall be reduced in an amount equal to one times the
amount by which it would have been reduced if such default had occurred before
Payout.  For such a default, whether occurring before or after Payout,
the Recalculated Ownership Interest shall then be further reduced:

      

      (A)           for
a default relating exclusively to an Exploration Program and Budget, by
multiplying the Recalculated Ownership Interest by the following percentage:
80%; or

      

      (B)           for
a default relating to a Program and Budget covering in whole or in part
Pre-Feasibility Study and/or Feasibility Study Operations, by multiplying
Recalculated Ownership Interest by the following percentage: 80%

      

      (C)           for
a default relating to a Program and Budget covering in whole or in part
Development or Mining, by multiplying the Recalculated Ownership Interest by the
following percentage:  80%

      

      The
Ownership Interest of the other Member shall be increased by the amount of the
reduction in the Ownership Interest of the Reduced Member, including the further
reduction under Subsections 10.5(b)(i)(A)
or (B), provided
however that all such dilution shall be subject to the limitation set forth in
Subsection
10.5(b)(iii).

      

      (ii)          Dilution
under this Subsection
11.5(b) shall be effective as of the date of the original default, and
Section 10.6 shall
not apply. The amount of any Cover Payment under Section 11.4 and interest
thereon, or any interest accrued in accordance with Section 11.3, shall be deemed
to be amounts contributed by the non-defaulting Member, and not as amounts
contributed by the defaulting Member.

      
        
           

        

        
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      (iii)         Whenever
the Ownership Interests are recalculated pursuant to this Subsection 11.5(b), (A) the
Equity Accounts of both Members shall be adjusted to bear the same ratio to each
other as their recalculated Ownership Interests; and (B) the portion of Capital
Account attributable to the reduced Ownership Interest of the Reduced Member
shall be transferred to the other Member.

      

      11.6         Audits.

      

      (a)           Within
ninety (90) days after the end of each calendar year, an audit shall be
completed by a PCAOB certified public accountants selected by, and independent
of, the Manager. The audit shall be conducted in accordance with United States
generally accepted auditing standards and shall cover all books and records
maintained by the Manager in accordance with United States generally accepted
accounting principles.  The cost of all audits under this Subsection
shall be charged to the Business Account.

      

      (b)           Notwithstanding
the annual audit conducted by certified public accountants selected by the
Manager, each Member shall have the right to have an independent audit of all
Company books, records and accounts, including all charges to the Business
Account.  This audit shall review all issues raised by the requesting
Member, with all costs borne by the requesting Member.  The requesting
Member shall give the other Member thirty (30) days prior notice of such
audit.  Any audit conducted on behalf of either Member shall be made
during the Manager’s normal business hours and shall not interfere with
Operations.  Neither Member shall have the right to audit records and
accounts of the Company relating to transactions or Operations more than
twenty-four (24) months after the calendar year during which such transactions,
or transactions related to such Operations, were charged to the Business
Account.  All written exceptions to and claims upon the Manager for
discrepancies disclosed by such audit shall be made not more than three (3)
months after completion and delivery of such audit, or they shall be deemed
waived.

      

      ARTICLE
XII

      PROPERTIES

      

      12.1         Royalties, Production Taxes and Other
Payments Based on Production. All required payments of production
royalties, taxes based on production of Products, and other payments out of
production to private parties and governmental entities, shall be determined and
made by the Company in a timely manner and otherwise in accordance with
applicable laws and agreements.   The Manager shall furnish to
the Members evidence of timely payment for all such required
payments.  In the event the Company fails to make any such required
payment, any Member shall have the right to make such payment and shall thereby
become subrogated to the rights of such third party; provided, however, that the
making of any such payment on behalf of the Company shall not constitute
acceptance by the paying Member of any liability to such third party for the
underlying obligation.

      

      12.2         Abandonment and Surrender.
Either Member may request the Management Committee to authorize the Manager to
surrender or abandon part or all of the Properties.  At the option of
the other Member, the Company shall assign to the objecting Member or such other
Person as the objecting Member specifies, by special warranty deed and without
cost to the objecting Member, all of the Company’s interest in the Properties
sought to be abandoned or surrendered, free and clear
of all Encumbrances created by, through or under the Company other than those to
which both Members have agreed.  Upon the assignment, such properties
shall cease to be part of the Properties.

      
        
           

        

        
          -25-

          
            

          

        

        
           

        

      

      

      ARTICLE
XIII

      CONFIDENTIALITY,
OWNERSHIP, USE

      AND
DISCLOSURE OF INFORMATION

      

      13.1         Business Information. All
Business Information shall be owned jointly by the Members as their Ownership
Interests are determined pursuant to this Agreement.  Both before and
after the termination of the Company, all Business Information may be used by
either Member for any purpose, whether or not competitive with the Business,
without consulting with, or obligation to, the other Member.  Except
as provided in Sections
13.3 and 13.4, or
with the prior written consent of the other Member, each Member shall keep
confidential and not disclose to any third party or the public any portion of
the Business Information that constitutes Confidential Information.

      

      13.2         Member Information. In
performing its obligations under this Agreement, neither Member shall be
obligated to disclose any Member Information.  If a Member elects to
disclose Member Information in performing its obligations under this Agreement,
such Member Information, together with all improvements, enhancements,
refinements and incremental additions to such Member Information that are
developed, conceived, originated or obtained by either Member in performing its
obligation under this Agreement (“Enhancements”), shall be owned
exclusively by the Member that originally developed, conceived, originated or
obtained such Member Information.  Each Member may use and enjoy the
benefits of such Member Information and Enhancements in the conduct of the
Business hereunder, but the Member that did not originally develop, conceive,
originate or obtain such Member Information may not use such Member Information
and Enhancements for any other purpose.  Except as provided in Section 13.4, or with the
prior written consent of the other Member, which consent may be withheld in such
Member’s sole discretion, each Member shall keep confidential and not disclose
to any third party or the public any portion of Member Information and
Enhancements owned by the other Member that constitutes Confidential
Information.

      

      13.3         Permitted Disclosure of Confidential
Business Information. Either Member may disclose Business Information
that is Confidential Information: (a) to a Member’s officers, directors,
partners, members, employees, Affiliates, shareholders, agents, attorneys,
accountants, consultants, contractors, subcontractors or advisors, for the sole
purpose of such Member’s performance of its obligations under this Agreement;
(b) to any party to whom the disclosing Member contemplates a Transfer of
all or any part of its Ownership Interest, for the sole purpose of evaluating
the proposed Transfer; (c) to any actual or potential lender, underwriter
or investor for the sole purpose of evaluating whether to make a loan to or
investment in the disclosing Member; or (d) to a third party with whom the
disclosing Member contemplates any independent business activity or
operation.

      

      The
Member disclosing Confidential Information pursuant to this Section 13.3, shall disclose
such Confidential Information to only those parties that have a bona fide need
to have access to such Confidential Information for the purpose for which
disclosure to such parties is permitted under this Section 13.3 and that have
agreed in writing supplied to, and enforceable by, the other Member to protect
the Confidential Information from further disclosure, to use such Confidential
Information solely for such purpose and to otherwise be bound by the provisions
of this Article XIII.  Such
writing shall not preclude parties described in Subsection 13.3(b) from
discussing and completing a Transfer with the other Member. The Member
disclosing Confidential Information shall be responsible and liable for any use
or disclosure of the Confidential Information by such parties in violation of
this Agreement and such other writing.

      
        
           

        

        
          -26-

          
            

          

        

        
           

        

      

      

      13.4         Disclosure Required By Law.
Notwithstanding anything contained in this Article, a Member may disclose any
Confidential Information if, in the opinion of the disclosing Member’s legal
counsel: (a) such disclosure is legally required to be made in a judicial,
administrative or governmental proceeding pursuant to a valid subpoena or other
applicable order; or (b) such disclosure is legally required to be made
pursuant to the rules or regulations of a stock exchange or similar trading
market applicable to the disclosing Member.

      

      Prior to
any disclosure of Confidential Information under this Section 13.4, the disclosing
Member shall give the other Member at least ten (10) days prior written notice
(unless less time is permitted by such rules, regulations or proceeding) and, in
making such disclosure, the disclosing Member shall disclose only that portion
of Confidential Information required to be disclosed and shall take all
reasonable efforts to preserve the confidentiality thereof, including, without
limitation, obtaining protective orders and supporting the other Member in
intervention in any such proceeding.

      

      13.5         Public Announcements. Prior to
making or issuing any press release or other public announcement or disclosure
of Business Information that is not Confidential Information, a Member shall
first consult with the other Member as to the content and timing of such
announcement or disclosure, unless in the good faith judgment of such Member,
there is not sufficient time to consult with the other Member before such
announcement or disclosure must be made under applicable Laws; but in such
event, the disclosing Member shall notify the other Member, as soon as possible,
of the pendency of such announcement or disclosure, and it shall notify the
other Member before such announcement or disclosure is made if at all reasonably
possible.  Any press release or other public announcement or
disclosure to be issued by either Member relating to this Business shall also
identify the other Member.

      

      ARTICLE
XIV

      RESIGNATION
AND DISSOLUTION

      

      14.1         Events of Dissolution. The
Company shall be dissolved upon the occurrence of any of the
following:

      

      (a)           Upon
expiration of term of this Agreement in accordance with Section 2.5;

      

      (b)           Upon
the unanimous written agreement of the Members;

      

      (c)           At
the election of either Member upon ninety (90) days notice of termination to the
other Member, if the Management Committee fails to adopt a Program and Budget
for six (6) months after the expiration of the latest adopted Program and
Budget;

      
        
           

        

        
          -27-

          
            

          

        

        
           

        

      

      (d)           Upon
the resignation of a Member pursuant to Section 14.2 or upon the
bankruptcy, insolvency, dissolution or assignment for the benefit of creditors
of a Member; or

      

      (e)           as
otherwise provided by the Act.

      

      14.2         Resignation. A Member may
elect to resign from the Company by giving notice to the other Member of the
effective date of resignation, which shall be the later of the end of the then
current Program Period or thirty (30) days after the date of the
notice.  Upon resignation by a Member, the resigning Member shall be
deemed to have transferred to the remaining Member all of its Ownership
Interest, including all of its interest in the Properties and Assets and its
Capital Account, without cost and free and clear of all Encumbrances arising by,
through or under such resigning Member, except those described in Paragraph 1.1 of Exhibit A and those to
which both Members have agreed.  The resigning Member shall execute
and deliver all instruments as may be necessary in the reasonable judgment of
the other Member to effect the transfer of its interests in the Company and the
Properties and Assets to the other Member.  A resigning Member shall
have no right to receive the fair value of his Ownership Interest pursuant to
§ 86.331 of the Act. If within a sixty (60) day period both Members
elect to withdraw, then the Company shall instead be deemed to have been
terminated by the written agreement of the Members pursuant to Section 14.1(b).

      

      14.3         Disposition of Properties and Assets
on Dissolution. Promptly after dissolution under Section 14.1, the Manager
shall take all action necessary to wind up the activities of the Company, in
accordance with Exhibit
C.  All costs and expenses incurred in connection with the
dissolution of the Company shall be expenses chargeable to the Business
Account.

      

      14.4         Filing of Certificate of
Cancellation. Upon completion of the winding up of the affairs of the
Company, the Manager shall promptly file a Certificate of Cancellation with the
Office of the Secretary of State of the State of Nevada. If the Manager has
caused the dissolution of the Company, whether voluntarily or involuntarily,
then a person selected by a majority vote of the Members to wind up the affairs
of the Company shall file the Certificate of Cancellation.

      

      14.5         Right to Data After
Dissolution. After dissolution of the Company pursuant to Subsections 14.1(a), (b), (c)
or (e), each Member
shall be entitled to make copies of all applicable information acquired
hereunder before the effective date of termination not previously furnished to
it, but a bankrupt or resigning Member causing a dissolution of the Company
pursuant to Subsection 14.1(d) shall
not be entitled to any such copies.

      

      14.6         Continuing Authority. On
dissolution of the Company under Section 14.1, the Member
that was the Manager prior to such dissolution (or the other Member in the event
of a resignation by the Manager) shall have the power and authority to do all
things on behalf of both Members that are reasonably necessary or convenient to:
(a) wind up Operations and (b) complete any transaction and satisfy
any obligation, unfinished or unsatisfied, at the time of such termination or
resignation, if the transaction or obligation arises out of Operations prior to
such termination or resignation. The Manager shall have the power and authority
to grant or receive extensions of time or change the method of payment of an
already existing liability or obligation, prosecute and defend actions on behalf
of the Company and either or both Members, encumber Properties and Assets, and
take any
other reasonable action in any matter with respect to which the former Members
continue to have, or appear or are alleged to have, a common interest or a
common liability.

      
        
           

        

        
          -28-

          
            

          

        

        
           

        

      

      

      ARTICLE
XV

      DISPUTES

      

      15.1         Governing Law. Except for
matters of title to the Properties or their Transfer, which shall be governed by
the law of their situs, this Agreement shall be governed by and interpreted in
accordance with the laws of the State of Nevada, without regard for any conflict
of laws or choice of laws principles that would permit or require the
application of the laws of any other jurisdiction.

      

      15.2         Forum
Selection.  The Parties hereby agree to the exclusive
jurisdiction of the courts of the State of Nevada, County of Washoe, in respect
of any disagreement relating to this Agreement or the LLC
Agreement.

      

      15.3         Arbitration.  All
claims, disputes and other matters in question arising out of or relating to
this Agreement or the breach or interpretation thereof, will be resolved by
binding arbitration before a sole arbitrator, selected by the mutual agreement
of the parties, to be conducted in Reno, Nevada.  The arbitration will
be administered by the American Arbitration Association (“AAA”) under its
Commercial Arbitration Rules.  Any award or decision obtained from any
such arbitration proceeding will be final and binding on the parties, and
judgment upon any award thus obtained may be entered in any court having
jurisdiction thereof.  Nothing herein contained will bar the right of
a party to seek to obtain judicial injunctive relief or other judicial
provisional remedies against threatened or actual conduct that will cause loss
or damages under the usual equity rules including the applicable rules for
obtaining preliminary injunctions and other provisional remedies.

      

      15.4         Dispute Resolution. All
disputes arising under or in connection with this Agreement which cannot be
resolved by agreement between the Members shall be resolved in accordance with
applicable Law. If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the successful or substantially prevailing Member shall be entitled
to recover reasonable attorneys’ fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be
entitled.

      

      ARTICLE
XVI

      GENERAL
PROVISIONS

      

      16.1           Notices. All notices, payments
and other required or permitted communications (“Notices”) to either Member
shall be in writing, and shall be addressed respectively as
follows:

      

      
        	 
      	
                If
      to GPXM:

              	
                Golden
      Phoenix Minerals, Inc.

              
	 
      	 
      	
                1675
      E. Prater Way, Suite 102

              
	 
      	 
      	
                Sparks,
      Nevada 89434, USA

              
	 
      	 
      	
                Attention:

              	
                Thomas
      Klein, CEO

              
	 
      	 
      	
                Telephone:

              	
                (775)
      853-4919

              
	 
      	 
      	
                Facsimile:

              	
                (775)
      853-4919

              

         

        
          
            
            

          

          
            -29-

            
              

            

          

          
            
            

          

        

         

        
          	 
      	
                  With
      a Copy to:

                	
                  Bullivant
      Houser Bailey PC

                
	 
      	 
      	
                  1415
      L Street, Suite 1000

                
	 
      	 
      	
                  Sacramento,
      CA 95814

                
	 
      	 
      	
                  Attention:

                	
                  Scott
      Bartel, Esq.

                
	 
      	 
      	
                  Facsimile:

                	
                  (916)
      930-2501

                
	 
      	 
      	 
      	 
      
	 
      	
                  If
      to Scorpio Gold or to Scorpio US

                	 
      	 
      
	 
      	 
      	
                  Scorpio
      Gold Corporation/Scorpio Gold (US) Corporation

                
	 
      	 
      	
                  995
      Germain Street

                
	 
      	 
      	
                  Val
      d’Or, Quebec J9P 7H7

                
	 
      	 
      	
                  Canada

                
	 
      	 
      	
                  Attention:

                	
                  Peter
      Hawley, President & CEO

                
	 
      	 
      	
                  Telephone:

                	
                  (819)
      825-7618

                
	 
      	 
      	
                  Facsimile:

                	
                  (819)
      825-0977

                
	 
      	 
      	 
      	 
      
	 
      	
                  With
      a Copy to:

                	
                  Axium
      Law Corporation

                
	 
      	 
      	
                  Suite
      3350, Four Bentall Centre

                
	 
      	 
      	
                  1055
      Dunsmuir Street

                
	 
      	 
      	
                  PO
      Box 49222

                
	 
      	 
      	
                  Vancouver,
      British Columbia

                
	 
      	 
      	
                  V7X
      1L2

                
	 
      	 
      	
                  Attention:

                	
                  Rod
      C. McKeen

                
	 
      	 
      	
                  Facsimile:

                	
                  (604)
      692-4900

                

        

      

      

      All
Notices shall be given (a) by personal delivery to the Member, (b) by electronic
communication, capable of producing a printed transmission, (c) by registered or
certified mail return receipt requested, or (d) by overnight or other express
courier service.  All Notices shall be effective and shall be deemed
given on the date of receipt at the principal address if received during normal
business hours, and, if not received during normal business hours, on the next
business day following receipt, or if by electronic communication, on the date
of such communication.  Either Member may change its address by Notice
to the other Member.

      

      16.2         Gender. The singular shall
include the plural, and the plural the singular wherever the context so
requires, and the masculine, the feminine, and the neuter genders shall be
mutually inclusive.

      

      16.3         Currency. All references to
“dollars” or “$” herein shall mean lawful currency of the United States of
America.

      

      16.4         Headings. The subject headings
of the Sections and Subsections of this Agreement and the Paragraphs and
Subparagraphs of the Exhibits to this Agreement are included for purposes of
convenience only, and shall not affect the construction or interpretation of any
of its provisions.

      
        
           

        

        
          -30-

          
            

          

        

        
           

        

      

      16.5         Waiver. The failure of either
Member to insist on the strict performance of any provision of this Agreement or
to exercise any right, power or remedy upon a breach hereof shall not constitute
a waiver of any provision of this Agreement or limit such Member’s right
thereafter to enforce any provision or exercise any right.

      

      16.6         Modification. No modification
of this Agreement shall be valid unless made in writing and duly executed by
both Members.

      

      16.7         Force Majeure. Except for the
obligation to make payments when due hereunder, the obligations of a Member
shall be suspended to the extent and for the period that performance is
prevented by any cause, whether foreseeable or unforeseeable, beyond its
reasonable control, including, without limitation, labor disputes (however
arising and whether or not employee demands are reasonable or within the power
of the Member to grant); acts of God; Laws, instructions or requests of any
government or governmental entity; judgments or orders of any court; inability
to obtain on reasonably acceptable terms any public or private license, permit
or other authorization; curtailment or suspension of activities to remedy or
avoid an actual or alleged, present or prospective violation of Environmental
Laws; action or inaction by any federal, state or local agency that delays or
prevents the issuance or granting of any approval or authorization required to
conduct Operations beyond the reasonable expectations of the Member seeking the
approval or authorization (including, without limitation, a failure to complete
any review and analysis required by the National Environ­mental Policy Act
or any similar state law within three (3) months of initiation of that process);
acts of war or conditions arising out of or attributable to war, whether
declared or undeclared; riot, civil strife, insurrection or rebellion; fire,
explosion, earthquake, storm, flood, sink holes, drought or other adverse
weather condition; delay or failure by suppliers or transporters of materials,
parts, supplies, services or equipment or by contractors’ or subcontractors’
shortage of, or inability to obtain, labor, transportation, materials,
machinery, equipment, supplies, utilities or services; accidents; breakdown of
equipment, machinery or facilities; actions by native rights groups,
environmental groups, or other similar special interest groups; or any other
cause whether similar or dissimilar to the foregoing. The affected Member shall
promptly give notice to the other Member of the suspension of performance,
stating therein the nature of the suspension, the reasons therefor, and the
expected duration thereof. The affected Member shall resume performance as soon
as reasonably possible. During the period of suspension the obligations of both
Members to advance funds pursuant to Section 11.2 shall be reduced
to levels consistent with then current Operations.

      

      16.8         Rule Against Perpetuities. The
Members do not intend that there shall be any violation of the Rule Against
Perpetuities, the Rule Against Unreasonable Restraints on the Alienation of
Property, or any similar rule. Accordingly, if any right or option to acquire
any interest in the Properties, in an Ownership Interest, in the Properties and
Assets, or in any real property exists under this Agreement, such right or
option must be exercised, if at all, so as to vest such interest within time
periods permitted by applicable rules.  If, however, any such
violation should inadvertently occur, the Members hereby agree that a court
shall reform that provision in such a way as to approximate most closely the
intent of the Members within the limits permissible under such
rules.

      

      16.9         Further Assurances. Each of
the Members shall take, from time to time and without additional consideration,
such further actions and execute such additional instruments as may be reasonably
necessary or convenient to implement and carry out the intent and purpose of
this Agreement or as may be reasonably required by lenders in connection with
Project Financing.

      
        
           

        

        
          -31-

          
            

          

        

        
           

        

      

      

      16.10       Entire Agreement; Successors and
Assigns. This Agreement contains the entire understanding of the Members
and supersedes all prior agreements and understandings between the Members
relating to the subject matter hereof.  This Agreement shall be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Members.

      

      16.11       Counterparts. This Agreement
may be executed in any number of counterparts, and it shall not be necessary
that the signatures of both Members be contained on any counterpart. Each
counterpart shall be deemed an original, but all counterparts together shall
constitute one and the same instrument.

      

      

      [Remainder
of Page Intentionally Left Blank.  Signature Page
Follows]

       

       

      
        
           

        

        
          -32-

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

      

      
        	 
      	
                Golden
      Phoenix Minerals, Inc.

              
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Robert P. Martin
	 
      	 
      	
                Name:
      Robert P. Martin

              
	 
      	 
      	
                Title:    President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                Scorpio
      Gold (US) Corporation

              
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Peter J. Hawley
	 
      	 
      	
                Name:
      Peter J. Hawley

              
	 
      	 
      	
                Title:   President

              

      

      

      

      

      
        
           

        

        
          -33-

          
            

          

        

        
           

        

      

      EXHIBIT
A

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      

      PROPERTIES
AND ASSETS AND AREA OF INTEREST

      

      

      
        	
                1.1

              	
                GPXM PROPERTIES AND
      TITLE EXCEPTIONS

              

      

      

      All
lands, mineral tenures

      (include list of all leases and
contracts)

      

      (Attached)

      

      

      

      

      

      1.2           GPXM
ASSETS

      

      All
facilities, equipment, permits, licenses, technical data and rights and
interests related thereto comprising the Mineral Ridge Mine property and any and
all environmental reclamation bonds and any other assets whatsoever related to
the Mineral Ridge Mine property, and all Products, Business Information, Bond,
all technical data relating to the Mineral Ridge Mine property and all other
real and personal property, and equipment, tangible and intangible, including
existing or after-acquired properties and all contract rights held for the
benefit of the Members hereunder.

       
 

      
        
          EXHIBIT A 

        

        
          Page 1 of
2

          
            

          

        

        
           

        

      

      1.3           SCORPIO US
PROPERTIES

      (Include
list)

       

       

       

      

      

      1.4           SCORPIO US
ASSETS

      

      Mary
Mining Royalty

      

      1.5           LIABILITIES

      

      All
unpaid liabilities associated with the Properties or operations at the
Properties accrued on or after the date that the Parties entered into the LOI
(as defined in the Members Agreement).

      

      1.6           AREA OF
INTEREST

      

      (Attached)

      

      
        
          EXHIBIT A   

        

        
          Page 2 of
2

          
            

          

        

        
           

        

      

      EXHIBIT
B

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      

      ACCOUNTING
PROCEDURES

      

      The
financing and accounting procedures to be followed by the Manager and the
Members under the Agreement are set forth below.  All capitalized
terms in these Accounting Procedures shall have the definition attributed to
them in the Agreement, unless defined otherwise herein.

      

      The
purpose of these Accounting Procedures is to establish equitable methods for
determining charges and credits applicable to Operations.  It is the
intent of the Members that neither of them shall lose or profit by reason of the
designation of one of them to exercise the duties and responsibilities of the
Manager.  The Members shall meet and in good faith endeavor to agree
upon changes deemed necessary to correct any unfairness or
inequity.  For the avoidance of doubt, notwithstanding the Agreement
and this Exhibit B regarding Account Procedures, all Accounting Procedures,
including maintenance of accounting records, shall follow United States
Generally Accepted Accounting Principles (US GAAP). Further, the Manager shall
ensure that the Company establishes and maintains such disclosure controls and
procedures and internal controls over financial reporting as may be reasonably
requested by GPXM to comply with the Sarbanes-Oxley Act of 2002 in its capacity
as a U.S. public reporting company.

      
 

      
        
          EXHIBIT
B

        

        
          Page 1 of
9

          
            

          

        

        
           

        

      

      ARTICLE
I

      GENERAL
PROVISIONS

      

      1.1           General Accounting
Records.  The Manager shall maintain detailed and comprehensive
cost accounting records in accordance with these Accounting Procedures,
including general ledgers, supporting and subsidiary journals, invoices, checks
and other customary documentation, sufficient to provide a record of revenues
and expenditures and periodic statements of financial position and the results
of Operations for managerial, tax, regulatory or other financial, regulatory, or
legal reporting purposes related to the Company.  Such records shall
be retained for the duration of the period allowed the Members for audit or the
period necessary to comply with tax or other regulatory requirements. The
records shall reflect all obligations, advances and credits of the
Members.

      

      1.2           Cash Management Accounts. The
Manager shall maintain one or more separate cash management accounts for the
payment of all expenses and the deposit of all cash receipts for the
Company.

      

      1.3           Statements and Billings. The
Manager shall prepare statements and bill the Members as provided in Article XI of the Agreement.
Payment of any such billings by either Member, including the Manager, shall not
prejudice such Member’s right to protest or question the correctness thereof for
a period not to exceed twenty-four (24) months following the calendar year
during which such billings were received by such Member.  All written
exceptions to and claims upon the Manager for incorrect charges, billings or
statements shall be made upon the Manager within such twenty-four
(24) month period.  The time period permitted for adjustments
hereunder shall not apply to adjustments resulting from periodic inventories as
provided in Paragraphs
5.1 and 5.2.

      

      ARTICLE
II

      CHARGES
TO BUSINESS ACCOUNT

      

      Subject
to the limitations hereinafter set forth, the Manager shall charge the Business
Account with the following:

      

      2.1           Property Acquisition Costs, Rentals,
Royalties and Other Payments. All property acquisition and holding costs,
including Governmental Fees, filing fees, license fees, costs of permits and
assessment work, delay rentals, production royalties, including any required
advances, and all other payments made by the Manager which are necessary to
acquire or maintain title to the Properties and Assets.

      

      2.2           Labor
and Employee Benefits.

      

      (a)           Salaries
and wages of the Manager’s employees directly engaged in Operations, including
salaries or wages of employees who are temporarily assigned to and directly
employed by same.

       
 

      
        
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      (b)           The
Manager’s cost of holiday, vacation, sickness and disability benefits, and other
customary allowances applicable to the salaries and wages chargeable under Subparagraph 2.2(a) and
Paragraph 2.12. Such
costs may be charged on a “when and as paid basis” or by “percentage assessment”
on the amount of salaries and wages.  If percentage assessment is
used, the rate shall be applied to wages or salaries excluding overtime and
bonuses.  Such rate shall be based on the Manager’s cost experience
and it shall be periodically adjusted at least annually to ensure that the total
of such charges does not exceed the actual cost thereof to the
Manager.

      

      (c)           The
Manager’s actual cost of established plans for employees’ group life insurance,
hospitalization, pension, retirement, stock purchase, thrift, bonus (except
production or incentive bonus plans under a union contract based on actual rates
of production, cost savings and other production factors, and similar non-union
bonus plans customary in the industry or necessary to attract competent
employees, which bonus payments shall be considered salaries and wages under
Subparagraph
2.2(a) or Paragraph
2.12 rather than employees’ benefit plans) and other benefit plans
of a like nature applicable to salaries and wages chargeable under Subparagraphs 2.2(a) or
Paragraph 2.12, provided
that the plans are limited to the extent feasible to those customary in the
industry.

      

      (d)           Cost
of assessments imposed by governmental authority that are applicable to salaries
and wages chargeable under Subparagraph 2.2(a) and
Paragraph 2.12,
including all penalties except those resulting from the willful misconduct or
gross negligence of the Manager.

      

      2.3           Materials, Equipment and
Supplies. The cost of materials, equipment and supplies (herein called
“Material”) purchased from unaffiliated third parties or furnished by
either Member as provided in Paragraph 3.2.  The
Manager shall purchase or furnish only so much Material as may be required for
immediate use in efficient and economical Operations.  The Manager
shall also maintain inventory levels of Material at reasonable levels to avoid
unnecessary accumulation of surplus stock.

      

      2.4           Equipment and Facilities Furnished by
Manager. The cost of machinery, equipment and facilities owned by the
Manager and used in Operations or used to provide support or utility services to
Operations charged at rates commensurate with the actual costs of ownership and
operation of such machinery, equipment and facilities.  Such rates
shall include costs of maintenance, repairs, other operating expenses,
insurance, taxes, depreciation and interest at a rate not to exceed Prime Rate
plus three percent (3%) per annum. Such rates shall not exceed the average
commercial rates currently prevailing in the vicinity of the
Operations.

      

      2.5           Transportation. Reasonable
transportation costs incurred in connection with the transportation of employees
and material necessary for Operations.

      

      2.6           Contract Services and
Utilities. The cost of contract services and utilities procured from
outside sources, other than services described in Paragraphs 2.9 and 2.13.  If contract
services are performed by the Manager or an Affiliate thereof, the cost charged
to the Business Account shall not be greater than that for which comparable
services and utilities are available in the open market within the vicinity of
Operations.  The cost of professional consultant services procured
from outside sources
in excess of Twenty-Five Thousand Dollars ($25,000.00) per annum per
contract shall not be charged to the Business Account unless approved by the
Management Committee.

      
 

      
        
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      2.7           Insurance Premiums. Net
premiums paid for insurance required to be carried for Operations for the
protection of the Members. When Operations are conducted in an area where the
Manager may self-insure for Workers’ Compensation and/or Employer’s Liability
under state law, the Manager may elect to include such risks in its
self-insurance program and shall charge its costs of self-insuring such risks to
the Business Account provided that such charges shall not exceed published
manual rates.

      

      2.8           Damages and Losses. All costs
in excess of insurance proceeds necessary to repair or replace damage or losses
to any Properties and Assets resulting from any cause other than the willful
misconduct or gross negligence of the Manager. The Manager shall furnish the
Management Committee with written notice of damages or losses as soon as
practicable after a report thereof has been received by the
Manager.

      

      2.9           Legal and Regulatory
Expense.  Except as otherwise provided in Paragraph 2.13, all legal and
regulatory costs and expenses incurred in or resulting from Operations or
necessary to protect or recover the Properties and Assets of the Company,
including costs of title investigation and title curative
services.  All attorneys’ fees and other legal costs to handle,
investigate and settle litigation or claims, and amounts paid in settlement of
such litigation or claims in excess of Twenty-Five Thousand Dollars
($25,000.00) per annum shall not be charged to the Business Account unless
approved by the Management Committee.

      

      2.10         Audit.  Cost of
annual audits under Subsection
11.6(a) of the Agreement.

      

      2.11         Taxes.  All taxes,
assessments and like charges on Operations, Properties and Assets which have
been paid by the Manager for the benefit of the Members.  Each Member
is separately responsible for taxes determined or measured by a Member’s sales
revenue or net income.

      

      2.12         District and Camp Expense (Field
Supervision and Camp Expenses).  A pro rata portion of:
(i) the salaries and expenses of the Manager’s superintendent and other
employees serving Operations whose time is not allocated directly to such
Operations, and (ii) the costs of maintaining and operating an office and
any necessary suboffice and (iii) all necessary camps, including housing
facilities for employees, used for Operations.  The expense of those
facilities, less any revenue therefrom, shall include depreciation or a fair
monthly rental in lieu of depreciation of the investment.  The total
of such charges for all Properties served by the Manager’s employees and
facilities shall be apportioned to the Business Account on the basis of a ratio
to be approved by the Management Committee.

       

       

      
        
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      2.13         Administrative
Charge.

      

      (a)           Each
month, the Manager shall charge the Business Account a sum for each phase of
Operations as provided below, which shall be a liquidated amount to reimburse
the Manager for its home office overhead and general and administrative expenses
to conduct each  phase of Operations, and which shall be in lieu of
any management fee:

      

      (i)       
     Exploration Expenses
– three percent (3%) of Allowable Costs.

      

      (ii)       
    Development and Construction
Expenses – three percent (3%) of Allowable Costs.

      

      (iii)           Major Construction
Phase – three percent (3%) of Allowable Costs.

      

      (iv)           Mining Phase – three
percent (3%) of Allowable Costs.

      

      (b)           The
term “Allowable Costs” as used in this Paragraph for a particular phase of
Operations shall mean all charges to the Business Account excluding:
(i) the administrative charge referred to herein; and
(ii) depreciation, depletion or amortization of tangible or intangible
Assets. The Manager shall attribute such Allowable Costs to a particular phase
of Operations by applying the following guidelines:

      

      (A)           The
Exploration Phase shall cover those Operations conducted to ascertain the
existence, location, extent or quantity of any deposit of ore or
mineral.

      

      (B)           The
Development Phase shall cover those Operations, including Pre-Feasibility and
Feasibility Study Operations, conducted to assess a commercially feasible ore
body or to extend production of an existing ore body, and to construct or
install related fixed Assets.

      

      (C)           The
Major Construction Phase shall include all Operations involved in the
construction of a mill, smelter or other ore processing facilities.

      

      (D)           The
Mining Phase shall include all other Operations activities not otherwise covered
above, including activities conducted after Mining Operations have
ceased.

      

      (c)           Various
phases of Operations may be conducted concurrently, in which event the
administrative charge shall be calculated separately for Allowable Costs
attributable to each phase.

      

      (d)           The
monthly administration charge determined for each phase of Operations shall be a
liquidated amount to reimburse the Manager for its home office overhead and
general and administrative expenses for its conduct of Operations, and shall be
equitably apportioned among all of the properties served during such monthly
period on the basis of a ratio approved by the Management
Committee.

      
 

      
        
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      (e)           The
following is a representative list of items that constitute the Manager’s
principal business office expenses that are expressly covered by the
administrative charge provided in this Paragraph, except to the extent that such
items are directly chargeable to the Business Account under other provisions of
this Article II:

      

      (i)           Administrative
supervision, which includes all services rendered by managers, department
supervisors, officers and directors of the Manager for Operations.

      

      (ii)           Accounting,
data processing, personnel administration, billing and record keeping in
accordance with governmental regulations and the provisions of the Agreement,
and preparation of reports;

      

      (iii)           The
services of tax counsel and tax administration employees for all tax matters,
including any protests, except any outside professional fees which the
Management Committee may approve as a direct charge to the Business
Account;

      

      (iv)           Routine
legal services rendered by outside sources and the Manager’s legal staff not
otherwise charged to the Business Account under Paragraph 2.9, including
property acquisition, attorney management and oversight, and support services
provided by Manager’s legal staff concerning any litigation; and

      

      (v)           Rentals
and other charges for office and records storage space, telephone service,
office equipment and supplies.

      

      (f)           The
Management Committee shall annually review the administrative charges and shall
amend the methodology or rates used to determine such charges if they are found
to be insufficient or excessive based on the principles that the Manager shall
not make a profit or suffer a loss and that it should be fairly and adequately
compensated for its costs and expenses.

      

      2.14        Environmental Compliance
Fund.  Costs of reasonably anticipated Environmental Compliance
which, on a Program basis, shall be determined by the Management Committee and
shall be based on proportionate contributions in an amount sufficient to
establish a fund, which through successive proportionate contributions during
the life of the Company, will pay for ongoing Environmental Compliance conducted
during Operations and which will aggregate the reasonably anticipated costs of
mine closure, post-Operations Environmental Compliance and Continuing
Obligations.  The Manager shall invest such amounts on behalf of the
Members as provided in Subsection 9.2(s) of the
Agreement.

      

      2.15        Other Expenditures. Any
reasonable direct expendi­ture, other than expenditures which are covered by
the foregoing provisions, incurred by the Manager for the necessary and proper
conduct of Operations.

      
 

      
        
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      ARTICLE
III

      BASIS
OF CHARGES TO BUSINESS ACCOUNT

      

      3.1           Purchases. Material purchased
and services procured from third parties shall be charged to the Business
Account by the Manager at invoiced cost, including applicable transfer taxes,
less all discounts taken.  If any Material is determined to be
defective or is returned to a vendor for any other reason, the Manager shall
credit the Business Account when an adjustment is received from the
vendor.

      

      3.2           Material Furnished by a Member for
Use in the Business.  Any Material furnished by either Member
for use in the Business or distributed to either Member by the Manager shall be
priced on the following basis:

      

      (a)           New Material: New
Material furnished by either Member shall be priced F.O.B. the nearest reputable
supply store or railway receiving point, where like Material is available, at
the current replacement cost of the same kind of Material, exclusive of any
available cash discounts, at the time it is furnished (the “New Price”).

      

      (b)           Used
Material.

      

      (i)    
        Used Material in sound and
serviceable condition and suitable for reuse without reconditioning shall be
priced as follows:

      

      (A)          Used
Material furnished by either Member shall be priced at seventy-five percent
(75%) of the New Price;

      

      (B)           Used
Material distributed to either Member shall be priced (i) at seventy-five
percent (75%) of the New Price if such Material was originally charged to
the Business Account as new Material, or (ii) at sixty-five percent
(65%) of the New Price if such Material was originally charged to the
Business Account as good used Material at seventy-five percent (75%) of the
New Price.

      

      (ii)           Other
used Material that, after reconditioning, will be further serviceable for
original function as good secondhand Material, or that is serviceable for
original function but not substantially suitable for reconditioning, shall be
priced at fifty percent (50%) of New Price. The cost of any reconditioning
shall be borne by the transferee.

      

      (iii)           Bad-Order
Material which is no longer usable for its original purpose without excessive
repair cost but further usable for some other purpose shall be priced on a basis
comparable with items normally used for that purpose.

      

      (iv)           All
other Material, including junk, shall be priced at a value commensurate with its
use or at prevailing prices.

      
 

      
        
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      (c)           Obsolete Material.
Any Material that is serviceable and usable for its original function, but its
condition is not equivalent to that which would justify a price as provided
above, shall be priced by the Management Committee.  Such price shall
be set at a level that will result in a charge to the Business Account equal to
the value of the service to be rendered by such Material.

      

      3.3           Premium Prices. Whenever
Material is not readily obtainable at published or listed prices because of
national emergencies, strikes or other unusual circumstances over which the
Manager has no control, the Manager may charge the Business Account for the
required Material on the basis of the Manager’s direct cost and expenses
incurred in procuring such Material and making it suitable for
use.  The Manager shall give written notice of the proposed charge to
the Members prior to the time when such charge is to be billed, whereupon either
Member shall have the right, by notifying the Manager within ten days of the
delivery of the notice from the Manager, to furnish at the usual receiving point
all or part of its share of Material suitable for use and acceptable to the
Manager.

      

      3.4           Warranty of Material Furnished by the
Manager or Members. Neither Member warrants any Material furnished beyond
any dealer’s or manufacturer’s warranty and no credits shall be made to the
Business Account for defective Material until adjustments are received by the
Manager from the dealer, manufacturer or their respective agents.

      

      ARTICLE
IV

      DISPOSAL
OF MATERIAL

      

      4.1           Disposition Generally. The
Manager shall have no obligation to purchase either Member’s interest in
Material.  The Management Committee shall determine the disposition of
major items of surplus Material, provided the Manager shall have the right to
dispose of normal accumulations of junk and scrap Material either by sale or by
transfer to the Members as provided in Paragraph 4.2.

      

      4.2           Distribution to Members. Any
Material to be distributed to the Members shall be made in proportion to their
respective Participating Interests, and corresponding credits shall be made to
the Business Account on the basis provided in Paragraph 3.2.

      

      4.3           Sales. Sales of Material to
third parties shall be credited to the Business Account at the net amount
received.  Any damages or claims by the Purchaser shall be charged
back to the Business Account if and when paid.

      

      ARTICLE
V

      INVENTORIES

      

      5.1           Periodic Inventories, Notice and
Representations. At reasonable intervals, inventories shall be taken by
the Manager, which shall include all such Material as is ordinarily considered
controllable by operators of mining properties and the expense of conducting
such periodic inventories shall be charged to the Business
Account.  The Manager shall give written notice to the Members of its
intent to take any inventory at least thirty (30) days before such inventory
is scheduled to take place. A Member shall be deemed to have accepted the
results of any inventory taken by the Manager if the Member fails to be
represented at such inventory.

       

       

      
        
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      5.2           Reconciliation and Adjustment of
Inventories. Reconciliation of inventory with charges to the Business
Account shall be made, and a list of overages and shortages shall be furnished
to the Management Committee within six (6) months after the inventory is
taken.  Inventory adjustments shall be made by the Manager to the
Business Account for overages and shortages, but the Manager shall be held
accountable to the Company only for shortages due to lack of reasonable
diligence.

       

       

       

      
        
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      EXHIBIT
C

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

       

      
 

      
        
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      TAX
MATTERS

      

      ARTICLE
I

      EFFECT
OF THIS EXHIBIT

      

      This
Exhibit shall govern the relationship of the Members and the Company with
respect to tax matters and the other matters addressed herein.  Except
as otherwise indicated, capitalized terms used in this Exhibit shall have the
meanings given to them in the Agreement. In the event of a conflict between this
Exhibit and the other provisions of the Agreement, the terms of this Exhibit
shall control.

      

      ARTICLE
II

      TAX
MATTERS PARTNER

      

      2.1           Designation of Tax Matters
Partner. The Manager is hereby designated the tax matters partner (the
“TMP”) as defined in
Section 6231(a)(7) of the Internal Revenue Code of 1986 (“the Code”) and shall
be responsible for, make elections for, and prepare and file any federal and
state tax returns or other required tax forms following approval of the
Management Committee.  In the event of any change in Manager, the
Member serving as Manager at the end of a taxable year shall continue as TMP
with respect to all matters concerning such year unless the TMP for that year is
required to be changed pursuant to applicable Treasury Regulations. The TMP and
the other Member shall use reasonable best efforts to comply with the
responsibilities outlined in this Article II and in
Sections 6221 through 6233 of the Code (including any Treasury regulations
promulgated thereunder) and in doing so shall incur no liability to any other
party.

      

      2.2           Notice. Each Member shall
furnish the TMP with such information (including information specified in
Section 6230(e) of the Code) as it may reasonably request to permit it to
provide the Internal Revenue Service with sufficient information to allow proper
notice to the Members in accordance with Section 6223 of the
Code.  The TMP shall keep each Member informed of all administrative
and judicial proceedings for the adjustment at the partnership level of
partnership items in accordance with Section 6223(g) of the Code.

      

      2.3           Inconsistent Treatment of Tax Item.
If an administrative proceeding contemplated under Section 6223 of the
Code has begun, and the TMP so requests, each Member shall notify the TMP of its
treatment of any partnership item on its federal income tax return that is
inconsistent with the treatment of that item on the partnership
return.

      

      2.4           Extensions of Limitation
Periods. The TMP shall not enter into any extension of the period of
limitations as provided under Section 6229 of the Code without first giving
reasonable advance notice to the other Member of such intended
action.

      

      2.5           Requests for Administrative
Adjustments. Neither Member shall file, pursuant to Section 6227 of the
Code, a request for an administrative adjustment of partnership items for any
taxable year of the Company without first notifying the other
Member.  If the other Member agrees with the requested adjustment, the
TMP shall file the request for administrative adjustment on behalf of the
Company.  If consent is not obtained within thirty (30) days after
notice from the proposing Member, or within the period required to timely file
the request for administrative adjustment, if shorter, either Member, including
the TMP, may file that request for administrative adjustment on its own
behalf.

       
 

      
        
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      2.6           Judicial Proceedings. Either
Member intending to file a petition under Section 6226, 6228 or other sections
of the Code with respect to any partnership item, or other tax matters involving
the Company, shall notify the other Member of such intention and the nature of
the contemplated proceeding.  If the TMP is the Member intending to
file such petition, such notice shall be given within a reasonable time to allow
the other Member to participate in the choosing of the forum in which such
petition will be filed.  If both Members do not agree on the
appropriate forum, then the appropriate forum shall be decided in accordance
with Section 8.2 of
the Agreement.  If a deadlock results, the TMP shall choose the
forum.  If either Member intends to seek review of any court decision
rendered as a result of a proceeding instituted under the preceding part of this
Paragraph, such Member shall notify the other Member of such intended
action.

      

      2.7           Settlements. The TMP shall not
bind the other Member to a settlement agreement without first obtaining the
written consent of any such Member.  Either Member who enters into a
settlement agreement for its own account with respect to any partnership items,
as defined by Section 6231(a)(3) of the Code, shall notify the other Member of
such settlement agreement and its terms within ninety (90) days from the date of
settlement.

      

      2.8           Fees and Expenses. The TMP
shall not engage legal counsel, certified public accountants, or others without
the prior consent of the Management Committee.  Either Member may
engage legal counsel, certified public accountants, or others in its own behalf
and at its sole cost and expense. Any reasonable item of expense, including but
not limited to fees and expenses for legal counsel, certified public
accountants, and others which the TMP incurs (after proper consent by the
Management Committee as provided above) in connection with any audit,
assessment, litigation, or other proceeding regarding any partnership item,
shall constitute proper charges to the Business Account and shall be borne by
the Members as any other item which constitutes a direct charge to the Business
Account pursuant to the Agreement.

      

      2.9           Survival.  The
provisions of the foregoing paragraphs, including but not limited to the
obligation to pay fees and expenses contained in Paragraph 2.8, shall survive
the termination of the Company or the termination of either Member’s interest in
the Company and shall remain binding on the Members for a period of time
necessary to resolve with the Internal Revenue Service or the Department of the
Treasury any and all matters regarding the federal income taxation of the
Company for the applicable tax year(s).

      

      ARTICLE
III

      TAX
ELECTIONS AND ALLOCATIONS

      

      3.1           Company Election. It is
understood and agreed that the Members intend to create a partnership for United
States federal and state income tax purposes, and, unless otherwise agreed to
hereafter by both Members, no Member shall take any action to change the status
of the Company as a
partnership under Treas. Reg. § 1.7701-3 or similar provision of state
law.  It is understood and agreed that the Members intend to create a
partnership for federal and state income tax purposes only.  The
Manager shall file with the appropriate office of the Internal Revenue Service a
partnership income tax return covering the Operations.  The Members
recognize that the Agreement may be subject to state income tax
statutes.  The Manager shall file with the appropriate offices of the
state agencies any required partnership state income tax
returns.  Each Member agrees to furnish to the Manager any information
it may have relating to Operations as shall be required for proper preparation
of such returns.  The Manager shall furnish to the other Member for
its review a copy of each proposed income tax return at least two weeks prior to
the date the return is filed.

       
 

      
        
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      3.2           Tax Elections. The Company
shall make the following elections for purposes of all partnership income tax
returns:

      

      (a)           To
use the accrual method of accounting.

      

      (b)           Pursuant
to the provisions at Section 706(b)(1) of the Code, to use as its taxable year
the year ended December 31st.  In
this connection, GPXM represents that its taxable year is the year ending
December 31st and
Scorpio US represents that its taxable year is the year ending December
31.

      

      (c)           To
deduct currently all development expenses to the extent possible under
Section 616 of the Code.

      

      (d)           Unless
the Members unanimously agree otherwise, to compute the allowance for
depreciation in respect of all depreciable Assets using the maximum accelerated
tax depreciation method and the shortest life permissible or, at the election of
the Manager, using the units of production method of depreciation.

      

      (e)           To
treat advance royalties as deductions from gross income for the year paid or
accrued to the extent permitted by law.

      

      (f)    
       To adjust the basis of property of the
Company under Section 754 of the Code at the request of either
Member;

      

      (g)           To
amortize over the shortest permissible period all organizational expenditures
and business start-up expenses under Sections 195 and 709 of the
Code;

      

      Any other
election required or permitted to be made by the Company under the Code or any
state tax law shall be made as determined by the Management
Committee.

      

      Each
Member shall elect under Section 617(a) of the Code to deduct currently all
exploration expenses.  Each Member reserves the right to capitalize
its share of development and/or exploration expenses of the Company in
accordance with Section 59(e) of the Code, provided that a Member’s election to
capitalize all or any portion of such expenses shall not affect the Member’s
Capital Account.

       

       

      
        
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      3.3           Allocations to Members.
Allocations for Capital Account purposes shall be in accordance with the
following:

      

      (a)           Exploration
expenses and development cost deductions shall be allocated among the Members in
accordance with their respective contributions to such expenses and
costs.

      

      (b)           Depreciation
and amortization deductions with respect to a depreciable Asset shall be
allocated among the Members in accordance with their respective contributions to
the adjusted basis of the Asset which gives rise to the depreciation,
amortization or loss deduction.

      

      (c)           Production
and operating cost deductions shall be allocated among the Members in accordance
with their respective contributions to such costs.

      

      (d)           Deductions
for depletion (to the extent of the amount of such deductions that would have
been determined for Capital Account purposes if only cost depletion were
allowable for federal income tax purposes) shall be allocated to the Members in
accordance with their respective contributions to the adjusted basis of the
depletable property. Any remaining depletion deductions shall be allocated to
the Members so that, to the extent possible, the Members receive the same total
amounts of percentage depletion as they would have received if percentage
depletion were allocated to the Members in proportion to their respective shares
of the gross income used as the basis for calculating the federal income tax
deduction for percentage depletion.

      

      (e)           Subject
to Subparagraph 3.3(g)
below, gross income on the sale of production shall be allocated in accordance
with the Members’ rights to share in the proceeds of such sale.

      

      (f)           Except
as provided in Subparagraph
3.3(g), below, gain or loss on the sale of a depreciable or depletable
asset shall be allocated so that, to the extent possible, the net amount
reflected in the Members’ Capital Account with respect to such property (taking
into account the cost of such property, depreciation, amortization, depletion or
other cost recovery deductions and gain or loss) most closely reflects the
Members’ Ownership Interests.

      

      (g)           Gains
and losses on the sale of all or substantially all the Properties
and  Assets of the Company shall be allocated so that, to the extent
possible, the Members’ resulting Capital Account balances are in the same ratio
as their Ownership Interests at the time of such sale.

      

      (h)           The
Members acknowledge that expenses and deductions allocable under the preceding
provisions of this Paragraph may be required to be capitalized into production
under Section 263A of the Code.  With respect to such capitalized
expenses or deductions, the allocation of gross income on the sale of production
shall be adjusted, in any reasonable manner consistently applied by the Manager,
so that the same net amount (subject possibly to timing differences) is
reflected in the Capital Accounts as if such expenses or deductions were instead
deductible and allocated pursuant to the preceding provisions of this
Paragraph.

       

       

      
        
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      (i)        
   All deductions and losses that are not otherwise allocated in
this Paragraph shall be allocated among the Members in accordance with their
respective contributions to the costs producing each such deduction or to the
adjusted basis of the Asset producing each such loss.

      

      (j)      
     Any recapture of exploration expenses under
Section 617(b)(1)(A) of the Code, and any disallowance of depletion under
Section 617(b)(1)(B) of the Code, shall be borne by the Members in the same
manner as the related exploration expenses were allocated to, or claimed by,
them.

      

      (k)           All
other items of income and gain shall be allocated to the Members in accordance
with their Ownership Interests.

      

      (l)      
     If a reduced Ownership Interest is restored
pursuant to Section 10.6 of the
Agreement, the Manager shall endeavor to allocate items of income, gain, loss,
and deduction (in the same year as the restoration of such Ownership Interest
or, if necessary, in subsequent years) so as to cause the Capital Account
balances of the Members to be the same as they would have been if the restored
Ownership Interest had never been reduced.

      

      (m)           If
the Members’ Ownership Interests change during any taxable year of the Company,
the distributive share of items of income, gain, loss and deduction of each
Member shall be determined in any manner (1) permitted by Section 706 of the
Code, and (2) agreed by both Members.  If the Members cannot agree on
a method, the method shall be determined by the Manager in consultation with the
Company’s tax advisers, with preference given to the interim
closing-of-the-books method except where application of that method would result
in undue administrative expense in relationship to the amount of the items to be
allocated.

      

      (n)           For
purposes of this Paragraph 3.3, items
financed through indebtedness of, or from revenues of, the Company shall be
treated as funded from contributions made by the Members to the Company in
accordance with their Ownership Interests.  “Nonrecourse deductions,”
as defined by Treas. Reg. § 1.704-2(b)(1) shall be allocated between the
Members in proportion to their Ownership Interests.

      

      3.4           Regulatory Allocations.
Notwithstanding the provisions of Paragraph 3.3 to the
contrary, the following special allocations shall be given effect for purposes
of maintaining the Members’ Capital Accounts.

      

      (a)           If
either Member unexpectedly receives any adjustments, allocations, or
distributions described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4),
§ 1.704-1(b)(2)(ii)(d)(5) or § 1.704-1(b)(2)(ii)(d)(6), which result
in a deficit Capital Account balance, items of income and gain shall be
specially allocated to each such Member in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations, the Capital
Account deficit of such Member as quickly as possible.  For the
purposes of this Subparagraph 3.4(a), each
Member’s Capital Account balance shall be increased by the sum of (i) the
amount such Member is obligated to restore pursuant to any provision of the
Agreement, and (ii) the amount such Member is deemed to be obligated to
restore pursuant to the penultimate sentences of Treas. Reg. §§ 1.704-2(g)(1)
and 1.704-2(i)(5).

       

       

      
        
          EXHIBIT C 

        

        
          Page 6 of
11

          
            

          

        

        
           

        

      

      

      (b)           If
there is a net decrease in partnership minimum gain for a taxable year of the
Company, each Member shall be allocated items of income and gain for that year
equal to that Member’s share of the net decrease in partnership minimum gain,
all in accordance with Treas. Reg. § 1.704-2(f).  If, during a
taxable year of the Company, there is a net decrease in partner nonrecourse debt
minimum gain, any Member with a share of that partner nonrecourse debt minimum
gain as of the beginning of the year shall be allocated items of income and gain
for the year (and, if necessary, for succeeding years) equal to that partner’s
share of the net decrease in partner nonrecourse debt minimum gain, all in
accordance with Treas. Reg. § 1.704-2(i)(4). Pursuant to Treas. Reg.
§ 1.704-2(i)(1), deductions attributable to “partner nonrecourse liability”
shall be allocated to the Member that bears the economic risk of loss for such
liability (or is treated as bearing such risk).

      

      (c)           If
the allocation of deductions to either Member would cause such Member to have a
deficit Capital Account balance at the end of any taxable year of the Company
(after all other allocations provided for in this Article III have been
made and after giving effect to the adjustments described in Subparagraph 3.4(a)), such
deductions shall instead be allocated to the other Member.

      

      3.5           Curative Allocations. The
allocations set forth in Paragraph 3.4 (the
“Regulatory Allocations”) are intended to comply with certain requirements of
the Treasury Regulations.  It is the intent of the Members that, to
the extent possible, all Regulatory Allocations shall be offset either with
other Regulatory Allocations or with special allocations of other items of
income, gain, loss or deduction pursuant to this Paragraph. Therefore,
notwithstanding any other provisions of this Article III (other than
the Regulatory Allocations), the Manager shall make such offsetting special
allocations of income, gain, loss or deduction in whatever manner it determines
appropriate so that, after such offsetting allocations are made, each Member’s
Capital Account balance is, to the extent possible, equal to the Capital Account
balance such Member would have had if the Regulatory Allocations were not part
of the Agreement and all items were allocated pursuant to Paragraph 3.3 without regard
to Paragraph 3.4.

      

      3.6           Tax Allocations. Except as
otherwise provided in this Paragraph 3.6, items of
taxable income, deduction, gain and loss shall be allocated in the same manner
as the corresponding item is allocated for book purposes under Paragraphs 3.3, 3.4 and 3.5 of the corresponding item
determined for Capital Account purposes.

      

      (a)           Recapture
of tax deductions arising out of a disposition of property shall, to the extent
consistent with the allocations for tax purposes of the gain or amount realized
giving rise to such recapture, be allocated to the Members in the same
proportions as the recaptured deductions were originally allocated or
claimed.

      

      (b)           To
the extent required by Section 704(c) of the Code, income, gain, loss, and
deduction with respect to property contributed to the Company by a Member shall
be shared among both Members so as to take account of the variation between the
basis of the property to the Company and its fair market value at the time of
contribution. The Members intend that Section 704(c) shall effect no allocations
of tax items that are different from the allocations under Paragraphs 3.3, 3.4 and 3.5 of the corresponding items
for Capital Account purposes; provided that gain or
loss on the sale of property contributed to the Company shall be allocated to
the contributing member to the extent of built-in gain or loss, respectively, as
determined under Treas. Reg. § 1.704-3(a). However, to the extent that
allocations of other tax items are required pursuant to Section 704(c) of
the Code to be made other than in accordance with the allocations under Paragraphs 3.3, 3.4 and 3.5 of the corresponding items
for Capital Account purposes, Section 704(c) shall be applied in accordance with
the method available under Treas. Reg. § 1.704-3 which most closely
approximates the allocations set forth in Paragraphs 3.3, 3.4 and
3.5.

       
 

      
        
          EXHIBIT C 

        

        
          Page 7 of
11

          
            

          

        

        
           

        

      

      

      (c)           Depletion
deductions with respect to contributed property shall be determined without
regard to any portion of the property’s basis that is attributable to
precontribution expendi­tures by GPXM that were capitalized under Code
Sections 616(b), 59(e) and 291(b).  Deductions attributable to
precontribution expenditures by GPXM shall be calculated under such Code
Sections as if GPXM continued to own the depletable property to which such
deductions are attributable, and such deductions shall be reported by the
Company and shall be allocated solely to GPXM.

      

      (d)           The
Members understand the allocations of tax items set forth in this Paragraph 3.6, and agree
to report consistently with such allocations for federal and state tax
purposes.

      

      ARTICLE
IV

      CAPITAL
ACCOUNTS; LIQUIDATION

      

      4.1           Capital
Accounts.

      

      (a)           A
separate Capital Account shall be established and maintained by the TMP for each
Member.  Such Capital Account shall be increased by (i) the
amount of money contributed by the Member to the Company, (ii) the fair
market value of property contributed by the Member to the Company (net of
liabilities secured by such contributed property that the Company is considered
to assume or take subject to under Code Section 752) and (iii) allocations
to the Member under Paragraphs 3.3, 3.4 and
3.5 of Company income
and gain (or items thereof), including income and gain exempt from tax; and
shall be decreased by (iv) the amount of money distributed to the Member by
the Company, (v) the fair market value of property distributed to the
Member by the Company (net of liabilities secured by such distributed property
and that the Member is considered to assume or take subject to under Code
Section 752), (vi) allocations to the Member under Paragraphs 3.3, 3.4 and
3.5 of expenditures of
the Company not deductible in computing its taxable income and not properly
chargeable to a Capital Account, and (vii) allocations of Company loss and
deduction (or items thereof), excluding items described in (vi) above and
percentage depletion to the extent it exceeds the adjusted tax basis of the
depletable property to which it is attributable.  The Members agree
that the net fair market value of the property and Assets contributed by GPXM to
the Company pursuant to Section
3.1(a) of the Agreement is Five Million Four Thousand Ninety-Nine Dollars
(US $5,004,099) and that the net fair market value of the property and Assets
contributed by Scorpio US is Ten Million Six Hundred and Thirty Six Thousand One
Hundred Fifty-Eight Dollars ($10,636,158).

      
 

      
        
          EXHIBIT C 

        

        
          Page 8 of
11

          
            

          

        

        
           

        

      

      (b)           In
the event that the Capital Accounts of the Members are computed with reference
to the book value of any Asset which differs from the adjusted tax basis of such
Asset, then the Capital Accounts shall be adjusted for depreciation, depletion,
amortization and gain or loss as computed for book purposes with respect to such
Asset in accordance with Treas. Reg. § 1.704-1(b) (2)(iv)(g).

      

      (c)           In
the event any interest in the Company is transferred in accordance with the
terms of the Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent it relates to the transferred interest, except as
provided in Treas. Reg. § 1.704-1(b)(2)(iv)(1).

      

      (d)           In
the event property, other than money, is distributed to a Member, the Capital
Accounts of the Members shall be adjusted to reflect the manner in which the
unrealized income, gain, loss and deduction inherent in such property (that has
not been reflected in the Capital Accounts previously) would be allocated among
the Members if there was a taxable disposition of such property for the fair
market value of such property (taking Section 7701(g) of the Code into account)
on the date of distribution. For this purpose the fair market value of the
property shall be determined as set forth in Paragraph 4.2(a)
below.

      

      (e)           In
the event the Management Committee designates a Supplemental Business
Arrangement area within the Area of Interest as described in Section 10.13 of the
Agreement, the Management Committee shall appropriately segregate Capital
Accounts to reflect that designation and shall make such other modifications to
the Agreement as are appropriate to reflect the manner of administering Capital
Accounts in accordance with the terms of this Exhibit C.

      

      (f)     
      GPXM is contributing to the Agreement
certain depletable properties with respect to which GPXM currently has an
adjusted tax basis which may consist in part of depletable expenditures and in
part of expenditures capitalized under Code Sections 616(b), 291(b) and/or
59(e).  For purposes of maintaining the Capital Accounts, the
Company’s deductions with respect to contributed property in each year for (i)
depletion, (ii) deferred development expenditures under Section 616(b)
attributable to pre-contribution expenditures, (iii) amortization under Section
291(b) attributable to pre-contribution expenditures, and (iv) amortization
under Section 59(e) attributable to pre-contribution expenditures shall be the
amount of the corresponding item determined for tax purposes pursuant to Subparagraph 3.6(c) multiplied
by the ratio of (A) the book value at which the contributed property is recorded
in the Capital Accounts to (B) the adjusted tax basis of the contributed
property (including basis resulting from capitalization of pre-contribution
development expenditures under Sections 616(b), 291(b), and 59(e)).

      

      (g)           The
foregoing provisions, and the other provisions of the Agreement relating to the
maintenance of Capital Accounts and the allocations of income, gain, loss,
deduction and credit, are intended to comply with Treasury Regulations Section
1.704-1(b), and shall be interpreted and applied in a manner consistent with
such Regulations.  In the event the Management Committee shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto, are computed in order to comply with such
Regulations, the Management Com­mittee may make such modification, provided
that it is not likely to have a material effect on the amount distributable to
either Member upon liquidation of the Company pursuant to Paragraph 4.2.

       

       

      
        
          EXHIBIT C 

        

        
          Page 9 of
11

          
            

          

        

        
           

        

      

      (h)           If
the Members so agree, upon the occurrence of an event described in Treas. Reg.
§ 1.704-1(b)(2)(iv)(5), the Capital Accounts shall be restated in
accordance with Treas. Reg. § 1.704-1(b)(2)(iv)(f) to reflect the manner in
which unrealized income, gain, loss or deduction inherent in the assets of the
Company (that has not been reflected in the Capital Accounts previously) would
be allocated among the Members if there were a taxable disposition of such
assets for their fair market values, as determined in accordance with Subparagraph
4.2(a).  For purposes of Paragraph 3.3, a Member shall
be treated as contributing the portion of the book value of any property that is
credited to the Member’s Capital Account pursuant to the preceding sentence.
Following a revaluation pursuant to this Subparagraph 4.1(h), the
Members’ shares of depreciation, depletion, amortization and gain or loss, as
computed for tax purposes, with respect to property that has been revalued
pursuant to this Subparagraph
4.1(h) shall be determined in accordance with the principles of Code
Section 704(c) as applied pursuant to the final sentence of Subparagraph
3.6(b).

      

      4.2           Liquidation. In the event the
Company is dissolved pursuant to Section 14.1 of the
Agreement then, notwithstanding any other provision of the Agreement to the
contrary, the following steps shall be taken (after taking into account any
transfers of Capital Accounts pursuant to Sections 3.2(a), 4.4(a) or 14.2 of the
Agreement):

      

      (a)           The
Capital Accounts of the Members shall be adjusted to reflect any gain or loss
which would be realized by the Company and allocated to the Members pursuant to
the provisions of Article
III of this Exhibit
C if the Properties and Assets had been sold at their fair market value
at the time of liquidation.  The fair market value of the Properties
and Assets shall be determined by agreement of both Members provided, however, that in
the event that the Members fail to agree on the fair market value of any Asset,
its fair market value shall be determined by a nationally recognized independent
engineering firm or other qualified independent party approved by both
Members.

      

      (b)           After
making the foregoing adjustments and/or contributions, all remaining Properties
and Assets shall be distributed to the Members in accordance with the balances
in their Capital Accounts (after taking into account all allocations under Article III, including Subparagraph
3.3(g)).  Unless otherwise expressly agreed by both Members,
each Member shall receive an undivided interest in each and every Asset
determined by the ratio of the amount in each Member’s Capital Account to the
total of both of the Members’ Capital Accounts. Assets distributed to the
Members shall be deemed to have a fair market value equal to the value assigned
to them pursuant to Subparagraph 4.2(a)
above.

      

      (c)           All
distributions to the Members in respect of their Capital Accounts shall be made
in accordance with the time requirements of Treas. Reg.
§§ 1.704-1(b)(2)(ii)(b)(2) and (3).

      

      4.3           Deemed Terminations.
Notwithstanding the provisions of Paragraph 4.2, if the
“liquidation” of the Company results from a deemed termination under Section
708(b)(1)(B) of the Code, then (i) Subparagraphs 4.2(a) and
(b) shall not apply, (ii) the Company shall be deemed to have
contributed its assets to a new partnership in exchange for an interest therein,
and immediately thereafter, distributing interests therein to the purchasing
party and the non-transferring Members in proportion
to their interests in the Company in liquidation thereof, (iii) the new
partnership shall continue pursuant to the terms of the Agreement and this
Exhibit.

       

       

      
        
          EXHIBIT C 

        

        
          Page 10
of 11

          
            

          

        

        
           

        

      

      

      ARTICLE
V

      SALE
OR ASSIGNMENT

      

      The
Members agree that if either one of them makes a sale or assignment of its
Ownership Interest under the Agreement, and such sale or assignment causes a
termination under Section 708(b)(1)(B) of the Code, the terminating Member shall
indemnify the non-terminating Member and save it harmless on an after-tax basis
for any increase in taxes to the non-terminating Member caused by the
termination of the Company.

       

       

      
        
          EXHIBIT C 

        

        
          Page 11
of 11

          
            

          

        

        
           

        

      

      EXHIBIT
D

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      DEFINITIONS

      

      

      “Act” means the Nevada Limited
Liability Company Act, codified in the Nevada Revised Statutes, Chapter 86,
et seq., as the same
may be amended from time to time.

      

      “Affiliate” means any person,
partnership, limited liability company, joint venture, corporation, or other
form of enterprise which Controls, is Controlled by, or is under common Control
with a Member.

      

      “Agreement” means this
Exploration, Development and Mining Limited Liability Company Operating
Agreement, including all amendments and modifications, and all schedules and
exhibits, all of which are incorporated by this reference.

      

      “Approved Alternative” means a
Development and Mining alternative selected by the Management Committee from
various Development and Mining alternatives analyzed in the Pre-Feasibility
Studies.

      

      “Area of Interest” means the
area encompassing a two (2) mile boundary from the original claim perimeter as
described in Paragraph
1.6 of Exhibit A.

      

      “Assets” means the Products,
Business Information, Bond, all technical data relating to the
Properties  and all other real and personal property, and equipment,
tangible and intangible, including
existing or after-acquired properties and all contract rights held for the
benefit of the Members hereunder.

       

       

      
        
          EXHIBIT D 

        

        
          Page 1 of
6

          
            

          

        

        
           

        

      

      

      “Bond” those certain
environmental and reclamation bonds in the amount of US$3,000,000 with respect
to the Properties filed with the Bureau of Land Management and all rights and
obligations relating thereto.

      

      “Budget” means a detailed
estimate of all costs to be incurred and a schedule of cash advances to be made
by the Members with respect to a Program.

      

      “Business” means the conduct
of the business of the Company in furtherance of the purposes set forth in Section 2.3 and in
accordance with this Agreement.

      

      “Business Account” means the
account maintained by the Manager for the Business in accordance with Exhibit B.

      

      “Business Information” means
the terms of this Agreement, and any other agreement relating to the Business,
the Existing Data, and all information, data, knowledge and know-how, in
whatever form and however communicated (including, without limitation,
Confidential Information), developed, conceived, originated or obtained by
either Member in performing its obligations under this Agreement. The term
“Business Information” shall not include any improvements, enhance­ments,
refinements or incremental additions to Member Information that are developed,
conceived, originated or obtained by either Member in performing its obligations
under this Agreement.

      

      “Capital Account” means the
account maintained for each Member in accordance with Exhibit C.

      

      “Company” means Mineral Ridge
Gold, LLC, a Nevada limited liability company formed in accordance with, and
governed by, this Agreement.

      

      “Commercial Production” means
throughput of Products from Mining Operations averaging greater than 70% of the
average life of mine projected capacity, as estimated by the Feasibility Study
to be prepared by Micon International Limited, for a period of at least two
consecutive financial quarters.

      

      “Confidential Information”
means all information, data, knowledge and know-how (including, but not limited
to, formulas, patterns, compilations, programs, devices, methods, techniques and
processes) that derives independent economic value, actual or potential, as a
result of not being generally known to, or readily ascertainable by, third
parties and which is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy, including without limitation all
analyses, interpretations, compilations, studies and evaluations of such
information, data, knowledge and know-how generated or prepared by or on behalf
of either Member.

       
 

      
        
          EXHIBIT D 

        

        
          Page 2 of
6

          
            

          

        

        
           

        

      

      “Continuing Obligations” mean
obligations or responsibilities that are reasonably expected to continue or
arise after Operations on a particular area of the Properties have ceased or are
suspended, such as future monitoring, stabilization, or Environmental
Compliance.

      

      “Control” used as a verb
means, when used with respect to an entity, the ability, directly or indirectly
through one or more intermediaries, to direct or cause the direction of the
management and policies of such entity through (i) the legal or beneficial
ownership of voting securities or membership interests; (ii) the right to
appoint managers, directors or corporate management; (iii) contract;
(iv) operating agreement; (v) voting trust; or otherwise; and, when
used with respect to a person, means the actual or legal ability to control the
actions of another, through family relationship, agency, contract or otherwise;
and “Control” used as a noun means an interest which gives the holder the
ability to exercise any of the foregoing powers.

      

      “Cover Payment” shall have the
meaning as set forth in Section
11.4 of the Agreement.

      

      “Development” means all
preparation (other than Exploration) for the removal and recovery of Products,
including construction and installation of a mill or any other improvements to
be used for the mining, handling, milling, processing, or other beneficiation of
Products, and all related Environmental Compliance.

      

      “Effective Date” means the
date set forth in the preamble to this Agreement.

      

      “Encumbrance” or “Encumbrances” means
mortgages, deeds of trust, security interests, pledges, liens, net profits
interests, royalties or overriding royalty interests, other payments out of
production, or other burdens of any nature.

      

      “Environmental Compliance”
means actions performed during or after Operations to comply with the
requirements of all Environmental Laws or contractual commitments related to
reclamation of the Properties or other compliance with Environmental
Laws.

      

      “Environmental Compliance
Fund” means the account established pursuant to Paragraph 2.14 of Exhibit B.

      

      “Environmental Laws” means
Laws aimed at reclamation or restoration of the Properties; abatement of
pollution; protection of the environment; protection of wildlife, including
endangered species; ensuring public safety from environmental hazards;
protection of cultural or historic resources; management, storage or control of
hazardous materials and substances; releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
as wastes into the environment, including without limitation, ambient air,
surface water and groundwater; and all other Laws relating to the manufacturing,
processing, distribution, use, treatment, storage, disposal, handling or
transport of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.

      

      “Environmental Liabilities”
means any and all claims, actions, causes of action, damages, losses,
liabilities, obligations, penalties, judgments, amounts paid in settlement,
assessments, costs, disbursements,
or expenses (including, without limitation, attorneys’ fees and costs, experts’
fees and costs, and consultants’ fees and costs) of any kind or of any nature
whatsoever that are asserted against either Member, by any person or entity
other than the other Member, alleging liability (including, without limitation,
liability for studies, testing or investigatory costs, cleanup costs, response
costs, removal costs, remediation costs, containment costs, restoration costs,
corrective action costs, closure costs, reclamation costs, natural resource
damages, property damages, business losses, personal injuries, penalties or
fines) arising out of, based on or resulting from (i) the presence,
release, threatened release, discharge or emission into the environment of any
hazardous materials or substances existing or arising on, beneath or above the
Properties and/or emanating or migrating and/or threatening to emanate or
migrate from the Properties to off-site properties; (ii) physical
disturbance of the environment; or (iii) the violation or alleged violation
of any Environmental Laws.

       
 

      
        
          EXHIBIT D 

        

        
          Page 3 of
6

          
            

          

        

        
           

        

      

      

      “Equity Account” means the
account maintained for each Member by the Manager in accordance with Subsection 9.2(o) of the
Agreement.

      

      “Existing Data” means maps,
drill logs and other drilling data, core, pulps, reports, surveys, assays,
analyses, production reports, operations, technical, accounting and financial
records, and other material information developed in operations on the
Properties prior to the Effective Date.

      

      “Expansion” or “Modification” means
(i) a material increase in mining or production capacity; (ii) a
material change in the recovery process; or (iii) a material change in
waste or tailings disposal methods.  An increase or change shall be
deemed “material” if it is anticipated to cost more than 35% of original capital
costs attributable to the Development of the mining or production capacity,
recovery process or waste or tailings disposal facility to be expanded or
modified.

      

      “Exploration” means all
activities directed toward ascertaining the existence, location, quantity,
quality or commercial value of deposits of Products, including but not limited
to additional drilling required after discovery of potential commercial
mineralization, and including related Environmental Compliance.

      

      “Feasibility Contractors”
means one or more engineering firms approved by the Management Committee for
purposes of preparing or auditing any Pre-Feasibility Study or Feasibility
Study.

      

      “Feasibility Study” means a
report to be prepared following selection by the Management Committee of one or
more Approved Alternatives. The Feasibility Study shall be in a form and of a
scope generally acceptable to reputable financial institutions that provide
financing to the mining industry.

      

      “Governmental Fees” means all
location fees, mining claim rental fees, mining claim maintenance payments and
similar payments required by Law to locate and hold unpatented mining
claims.

       
 

      
        
          EXHIBIT D 

        

        
          Page 4 of
6

          
            

          

        

        
           

        

      

      “Initial Contribution” means
that contribution each Member has made or agrees to make pursuant to Section 3.1 of the
Agreement.

      

      “Law” or “Laws” means all applicable
federal, state and local laws (statutory or common), rules, ordinances,
regulations, grants, concessions, franchises, licenses, orders, directives,
judgments, decrees, and other governmental restrictions, including permits and
other similar requirements, whether legislative, municipal, administrative or
judicial in nature.

      

      “Management Committee” means
the committee established under Article VIII of the
Agreement.

      

      “Manager” means the Member
appointed under Article
IX of the Agreement to manage Operations, or any successor
Manager.

      

      “Member” means GPXM or Scorpio
US, any permitted successor or assign of GPXM or Scorpio US, or any other person
admitted as a Member of the Company under this Agreement.

      

      “Member Information” means all
information, data, knowledge and know-how, in whatever form and however
communicated (including, without limitation, Confidential Information but
excluding the Existing Data), which, as shown by written records, was developed,
conceived, originated or obtained by a Member: (a) prior to entering into
this Agreement, or (b) independent of its performance under the terms of
this Agreement.

      

      “Mining” means the mining,
extracting, producing, beneficiating, handling, milling or other processing of
Products.

      

      “Net Cash Flow” means the
difference between gross proceeds from the sale of Products and Assets and the
costs of producing Products as determined by charges to the Business Account in
Exhibit B, less three
months working capital, and any other amounts determined reasonable and
necessary by the Management Committee for the ongoing operations of the
Company.

      

      “Operations” means the
activities carried out by the Company under this Agreement.

      

      “Ownership Interest” means the
percentage interest representing the ownership interest of a Member in the
Company, and all other rights and obligations arising under this Agreement, as
such interest may from time to time be adjusted hereunder.  Ownership
Interests shall be calculated to three decimal places and rounded to two decimal
places as follows:  Decimals of .005 or more shall be rounded up
(e.g., 1.519% rounded
to 1.52%); decimals of less than .005 shall be rounded down (e.g., 1.514% rounded to
1.51%).  The initial Ownership Interests of the Members are set forth
in Section 4.1 of the
Agreement.

      

      “Payout” means the date on
which the Equity Account balance of each of the Members has become zero or a
negative number, regardless of whether the Equity Account balance of either or
both Members subsequently becomes a positive number.  If one Member’s
Equity Account balance becomes
zero or a negative number before the other Member’s, “Payout” shall not occur
until the date that the other Member’s Equity Account balance first becomes zero
or a negative number.

       

       

      
        
          EXHIBIT D 

        

        
          Page 5 of
6

          
            

          

        

        
           

        

      

      

      “Pre-Feasibility Studies”
means one or more studies prepared to analyze whether economically viable Mining
Operations may be possible on the Properties, as described in Sections 10.7 and 10.8 of the
Agreement.

      

      “Prime Rate” means the
interest rate quoted and published as “Prime” as published in The Wall Street Journal,
under the heading “Money Rate,” as the rate may change from day to
day.

      

      “Products” means all ores,
minerals and mineral resources produced from the Properties.

      

      “Program” means a description
in reasonable detail of Operations to be conducted and objectives to be
accomplished by the Manager for a period determined by the Management
Committee.

      

      “Program Period” means the
time period covered by an adopted Program and Budget.

      

      “Project Financing” means any
financing approved by the Management Committee and obtained by the Members for
the purpose of placing a mineral deposit situated on the Properties into
commercial production, but shall not include any such financing obtained
individually by either Member to finance payment or performance of its
obligations under the Agreement.

      

      “Properties” means those
interests in real property described in Paragraph 1.1 of Exhibit A and all other
interests in real property within the Area of Interest that are acquired and
held subject to this Agreement.

      

      “Recalculated Ownership
Interest” means the reduced Ownership Interest of a Member as
recalculated under Section 10.5, 10.6 or 11.5 of the
Agreement.

      

      “Reduced Member” means a
Member whose Ownership Interest is reduced under Section 10.5, 10.6 or
11.5 of the
Agreement.

      

      “Transfer” means, when used as
a verb, to sell, grant, assign or create an Encumbrance, pledge or otherwise
convey, or dispose of or commit to do any of the foregoing, or to arrange for
substitute performance by an Affiliate or third party (except as permitted under
Subsection 9.2(j)
and Section 9.6 of
the Agreement), either directly or indirectly; and, when used as a noun, means
such a sale, grant, assignment, Encumbrance, pledge or other conveyance or
disposition, or such an arrangement.

       
 

      
        
          EXHIBIT D 

        

        
          Page 6 of
6

          
            

          

        

        
           

        

      

      EXHIBIT
E

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      INSURANCE

      

      The
Manager shall, at all times while conducting Operations, comply fully with the
applicable workers’ compensation laws and purchase, or provide protection for
the Company comparable to that provided under standard form insurance policies
for the following risk categories: (i) comprehensive public liability and
property damage (including umbrella coverage) with combined limits of not less
than Ten Million Dollars ($10,000,000) for bodily injury and property damage;
(ii) automobile insurance with combined limits of not less than Two Million
Dollars ($2,000,000); and (iii) adequate and reasonable insurance against
risk of fire and other risks ordi­narily insured against in similar
operations. If the Manager elects to self-insure, it shall charge to the
Business Account an amount equal to the premium it would have paid had it
secured and maintained a policy or policies of insurance on a competitive bid
basis in the amount of such coverage. Each Member shall self-insure or purchase
for its own account such additional insurance as it deems
necessary.

       

       

       

      
        
          EXHIBIT E 

        

        
          Page 1 of
1

          
            

          

        

        
           

        

      

      EXHIBIT
F

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      PREEMPTIVE
RIGHTS

      

      

      1.1           Preemptive Rights. If either
Member intends to Transfer all or any part of its Ownership Interest, or an
Affiliate of either Member intends to Transfer Control of such Member (“Transferring Entity”), such
Member shall promptly notify the other Member of such intentions. The notice
shall state the price and all other pertinent terms and conditions of the
intended Transfer, and shall be accompanied by a copy of the offer or the
contract for sale. If the consideration for the intended transfer is, in whole
or in part, other than monetary, the notice shall describe such consideration
and its monetary equivalent (based upon the fair market value of the nonmonetary
consideration and stated in terms of cash or currency).  The other
Member shall have fifteen (15) days from the date such notice is delivered to
notify the Transferring Entity (and the Member if its Affiliate is the
Transferring Entity) whether it elects to acquire the offered interest at the
same price (or its monetary equivalent in cash or currency) and on the same
terms and conditions as set forth in the notice. If it does so elect, the
acquisition by the other Member shall be consummated promptly after notice of
such election is delivered.

      

      (a)           If
the other Member fails to so elect within the period provided for above, the
Transferring Entity shall have ninety (90) days following the expiration of such
period to consummate the Transfer to a third party at a price and on terms no
less favorable to the Transferring Entity than those offered by the Transferring
Entity to the other Member in the aforementioned notice.

       
 

      
        
          EXHIBIT F 

        

        
          Page 1 of
2

          
            

          

        

        
           

        

      

      (b)           If
the Transferring Entity fails to consummate the Transfer to a third party within
the period set forth above, the preemptive right of the other Member in such
offered interest shall be deemed to be revived. Any subsequent proposal to
Transfer such interest shall be conducted in accordance with all of the
procedures set forth in this Paragraph.

      

      1.2           Exceptions to Preemptive
Right. Paragraph
1.1 above shall not apply to the following:

      

      (a)           Transfer
by either Member of all or any part of its Ownership Interest to an
Affiliate;

      

      (b)           Incorporation
of either Member, or corporate consolidation or reorganization of either Member
by which the surviving entity shall possess substantially all of the stock or
all of the property rights and interests, and be subject to substantially all of
the liabilities and obligations of that Member;

      

      (c)           Corporate
merger or amalgamation involving either Member by which the surviving entity or
amalgamated company shall possess all of the stock or all of the property rights
and interests, and be subject to substantially all of the liabilities and
obligations of that Member;

      

      (d)           the
transfer of Control of either Member by an Affiliate to such Member or to
another Affiliate;

      

      (e)           subject
to Subsection 7.2(g) of the
Agreement, the grant by either Member of a security interest in its Ownership
Interest by Encumbrance; or

      

      (f)           the
creation by any Affiliate of either Member of an Encumbrance affecting its
Control of such Member.

       

      

      
        
          EXHIBIT F 

        

        
          Page 2 of
2

          
            

          

        

        
           

        

      

      EXHIBIT
G

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      QUITCLAIM
DEED

       

       

       

      
 

      
        
          EXHIBIT G 

        

        
          Page 1 of
5

          
            

          

        

        
           

        

      

      APN:

      

      WHEN
RECORDED MAIL TO and:

      MAIL
PROPERTY TAX STATEMENTS TO:

      

      Mineral
Ridge Gold, LLC

      815
Murray Way

      Suite
201

      Elko,
Nevada 89801

      

      The
undersigned affirms that this document

      contains
no Social Security Numbers

       

        
          

        

      

       

      QUITCLAIM
DEED

       

      For valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, GOLDEN PHOENIX MINERALS, INC.,
a Nevada corporation, with an address of 1675 E. Prater Way, Suite 102, Sparks,
Nevada  89434, does hereby remise, release and forever quitclaim to
MINERAL RIDGE GOLD, LLC, a Nevada limited liability company, with an address of
815 Murray Way, Suite 201, Elko, Nevada 89801, all of its right, title and
interest in and to that real property situated in the County of Esmeralda, State
of Nevada, described as follows:

      

      See
Exhibit “A”

      

      together
with all and singular tenements, hereditaments and appurtenances thereunto
belonging or in anywise appertaining.

      

      WITNESS
my hand this ____ day of ________________, 2010.

      

      
        	 
      	 
      	
                Golden
      Phoenix Minerals, Inc.,

              
	 
      	 
      	
                a
      Nevada corporation

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                By:

              	
                 

              
	 
      	 
      	
                Name:

              	
                Thomas
      Klein

              
	 
      	 
      	
                Its:

              	
                Chief
      Executive Officer

              
	
                CANADA

              	
                )

              	 
      	 
      
	 
      	
                )

              	 
      	 
      
	
                PROVINCE
      OF ONTARIO

              	
                )

              	 
      	 
      
	 
      	
                )ss.

              	 
      	 
      

      

      

      This instrument was acknowledged before
me on ____________________, 2010 by Thomas Klein, Chief Executive Officer of
Golden Phoenix Minerals, Inc., a Nevada corporation.

      

      
        	 
      	
                 

              	 
      
	 
      	
                Signature
      of Notarial Officer

              	 
      

      

      
        
          EXHIBIT G 

        

        
          Page 2 of
5

          
            

          

        

        
           

        

      

      EXHIBIT
“A”

      LEGAL
DESCRIPTION

       

       

      
 

      
        
          EXHIBIT G 

        

        
          Page 3 of
5

          
            

          

        

        
           

        

      

      APN:

      

      WHEN
RECORDED MAIL TO and:

      MAIL
PROPERTY TAX STATEMENTS TO:

      

      Mineral
Ridge Gold, LLC

      815
Murray Way

      Suite
201

      Elko,
Nevada 89801

      

      Attention:

      

      The
undersigned affirms that this document

      contains
no Social Security Numbers

       

      
        
          

        

      

      

      QUITCLAIM
DEED

       

      For valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, SCORPIO GOLD (US) CORPORATION,
a Nevada corporation, with an address of 815 Murray Way, Suite 201, Elko, Nevada
89801, does hereby remise, release and forever quitclaim to MINERAL RIDGE GOLD,
LLC, a Nevada limited liability company, with an address of 815 Murray Way,
Suite 201, Elko, Nevada 89801, all of its right, title and interest in and to
that real property situated in the County of Esmeralda, State of Nevada,
described as follows:

      

      See
Exhibit “A”

      

      together
with all and singular tenements, hereditaments and appurtenances thereunto
belonging or in anywise appertaining.

      

      WITNESS my hand this ____ day of
________________, 2010.

      

      
        	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                 

              	 
      	
                SCORPIO
      GOLD (US) CORPORATION,

              
	 
      	 
      	
                a
      Nevada corporation

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              	
                Peter
      J. Hawley

              
	 
      	 
      	
                Its:

              	
                President

              
	 
      	 
      	 
      	 
      
	
                CANADA

              	
                )

              	 
      	 
      
	 
      	
                )

              	 
      	 
      
	
                PROVINCE
      OF QUEBEC

              	
                )

              	 
      	 
      
	 
      	
                )ss.

              	 
      	 
      

      

      

      This instrument was acknowledged before
me on ____________________, 2010 by Peter J. Hawley, President of Scorpio Gold
(US) Corporation, a Nevada corporation.

      

      
        	 
      	
                 

              	 
      
	 
      	
                Signature
      of Notarial Officer

              	 
      

      

      

      
        
          EXHIBIT G 

        

        
          Page 4 of
5

          
            

          

        

        
           

        

      

      EXHIBIT
“A”

      LEGAL
DESCRIPTION

      

       

       

      

      
        
          EXHIBIT G 

        

        
          Page 5 of
5

          
            

          

        

        
           

        

      

      EXHIBIT
H

      

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      

      LETTER
AGREEMENT BETWEEN GPXM, SCORPIO US AND CRESTVIEW

       

      
 

      
        
          EXHIBIT H 

        

        
          Page 1 of
3

          
            

          

        

        
           

        

      

      Crestview
Capital Master, LLC

      95 Revere
Drive, Suite A

      Northbrook,
IL 60062

      

      

      March 10,
2010

      

      

      Golden
Phoenix Minerals, Inc.

      1675 East
Prater Way, Suite 102

      Sparks,
Nevada 89434

      

      Scorpio
Gold (US) Corporation

      995
Germain Street

      Val d’Or,
PQ J9P 7H7

      

      Re:           Security
Interest in Golden Phoenix Membership Interest in Mineral Ridge Gold,
LLC

      

      Gentlemen:

      

      This will
confirm our mutual understandings and agreements with respect to the Membership
Interest (the “Interest”) Golden Phoenix Minerals, Inc. (“GP”) will hold in
Mineral Ridge Gold, LLC (the “LLC”), as well as confirm the contractual right of
Crestview Capital Master, LLC (“Crestview”) to the assignment of 50% of all
distributions in cash or kind to be made to GP by the LLC, to be applied as a
prepayment on that certain Amended and Restated Debt Restructuring Secured
Promissory Note dated February 6, 2009 (the “Note”), all as provided for in the
First Amended and Restated Security Agreement between GP and Crestview dated
February 6, 2009 (the “Agreement”) and the Bridge Loan and Debt
Restructuring Agreement between GP and Crestview dated January 30, 2009 (the
“Restructuring Agreement”).  You have requested that we accept as not
violating any requirement of the Agreement (including those regarding GP keeping
collateral free from “Liens”), the application of Section 7.2 of the LLC’s
Operating Agreement (the “Operating Agreement”) between GP and Scorpio Gold (US)
Corporation (“Scorpio”).  The undersigned mutually understand and
agree that under such Section 7.2, in the event of a proposed sale of GP’s
Membership Interest upon a default by GP of the Agreement, the Membership
Interest must first be offered to Scorpio as the other member of the LLC, and
Scorpio will have the right, for up to sixty (60) days, to elect to purchase the
same for an amount no less than the accrued unpaid principal and accrued
interest and related expenses owing on the Note.  We hereby agree to
the foregoing and GP in turn agrees that if we exercise our right to sell the
Membership Interest, a sale pursuant to Section 7.2(g) will be considered
“commercially reasonable” under the provisions of the Nevada Commercial
Code.

      

      This will
further confirm that GP has notified the undersigned that pursuant to the
Restructuring Agreement it has assigned to Crestview 50% of all distributions in
cash or kind made in respect of the Interest for so long as the Note is
outstanding, and the undersigned, Scorpio, confirms in its capacity as Manager
of the LLC, that the LLC shall direct all such portions of distributions to
Crestview until such time as Crestview and GP jointly confirm that the Note has
been repaid in full, at which time Crestview shall release its security interest
in the Interest and will release the assignment of 50% of GP’s portion of
distributions described herein.

      

      

      [Signature
Page Immediately Follows]

       

      
 

      
        
          EXHIBIT H 

        

        
          Page 2 of
3

          
            

          

        

        
           

        

      

      

      Please
indicate your agreement by signing a copy hereof where indicated below and
delivering the same us.

      

      
        	
                 

              	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                CRESTVIEW
      CAPITAL MASTER, LLC

              
	 
      	 
      
	 
      	
                By:  Crestview
      Capital Partners, LLC

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:    /s/
      Daniel Warsh       
    

              
	 
      	
                Name: 
      Daniel Warsh

              
	 
      	
                Title:   
      Manager

              

      

      

      Accepted
and Agreed:

      

      GOLDEN
PHOENIX MINERALS, INC.

      

      By:             /s/
Thomas Klein                

      Name:           Thomas
Klein                  

      Its:           Chief Executive
Officer        

      Date:           March 10,
2010                  

      

      

      SCORPIO
GOLD (US) CORPORATION

      

      By:             /s/
Peter
Hawley                  

      Name:           Peter
Hawley                    

      Its:           Chief Executive
Officer        

      Date:           March 10,
2010                  

      

      

      
        
          EXHIBIT H 

        

        
          Page 3 of
3

          
            

          

        

        
           

        

      

      SCHEDULE

      TO

      EXPLORATION,
DEVELOPMENT AND MINING

      JOINT
VENTURE

      MEMBERS’
AGREEMENT

      AND

      LIMITED
LIABILITY COMPANY

      OPERATING
AGREEMENT

      

      By And
Between

      

      Scorpio
Gold (US) Corporation

      

      And

      

      Scorpio
Gold Corporation

      

      And

      

      Golden
Phoenix Minerals, Inc.

      

      SCHEDULE
OF MEMBERS

      

      
        	
                Member

              	
                Ownership
      Interest

              
	
                Scorpio
      Gold (US) Corporation

              	
                70%

              
	
                Golden
      Phoenix Minerals, Inc.

              	
                30%

              

      

      

       

       

      
 

      SCHEDULE

      Page
1 of 1

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