As filed with the Securities and Exchange Commission on May 15, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GOLDEN PHOENIX MINERALS, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-187178
(State or other jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
3995 Airway Drive, Suite 405
Reno, Nevada 89511
(Address of principal executive office) (Zip Code)
Registrant's telephone number: (702) 853-4919
Charles Clayton
527 Marquette
Minneapolis, Minnesota 55402
(612) 338-3738
(Agent for Service)
Approximate date of commencement of proposed sale to the public. From
time to time after the effective date of the Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest investment plans, please check ____
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check ____
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ____
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ____
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check. __X__
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of shares to be registered Amount to Proposed Proposed Amount of
be Registered Maximum Maximum Registration
Offering Aggregate Fee
Price Per Offering Price
Share(1) (1)
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<S> <C> <C> <C> <C>
Common stock 400,000 $.50 $200,000 $100.00
Total $100.00
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. Based upon the average
of the high and low sales prices of the Company's Common Stock as reported by
the OTC Bulletin Board on May 5, 1998.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of Issuance and Distribution
Securities and Exchange Commission registration fee $100
Accounting fees $2,500
Legal fees $2,500
Printing and mailing $1,000
Total $6,100
Item 15. Indemnification of Directors and Officers
The only statute, charter provision, by-law contract or other
arrangement under which any director, officer or controlling person of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such, is set forth in the Registrant's Articles
of Incorporation, as amended, and in provisions of the Minnesota Corporation
Code and provide that in the event such statute is amended, the Registrant shall
indemnify such persons to the fullest extent permitted under Minnesota law.
However, under such statute, if a director, officer or controlling person is
unsuccessful on the merits in any proceeding, indemnification is authorized
under the statute only if such person is found to have met the statutory
standard of conduct either by a majority vote of a quorum of directors who are
not parties to the action, by independent legal counsel in a written opinion, or
by a shareholder vote.
Additionally, as authorized under the Minnesota Corporation Code,
the Articles of Incorporation of the Registrant provide that no director of the
Registrant shall be personally liable to the Registrant or its shareholders for
monetary damages for breach of his fiduciary duty as a director, except for
liability for (i) any breach of the duty of loyalty, (ii) acts or omission not
in good faith or which involve intentional misconduct or a knowing violation of
the law, (iii) acts in violation of Minnesota Corporation Code or any successor
legislation, or (iv) any transaction from which such director derives an
improper personal benefit. The Articles of Incorporation provide that with
respect to these provisions, such provisions shall be automatically amended in
the event that the proceeding statutory provisions are amended, modified
expanded or otherwise changed to provide that directors liability will be
limited to the fullest extent allowed under the law.
Item 16. Exhibits
5 Opinion of Counsel
23 Consent of Accountant
<PAGE>
Item 17. Undertakings
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any
additional or changed material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement:
(2) That, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be treated as a new registration
statement relating to the securities offered herein, and shall treat the
offering of such securities at that time as the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That for purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, (and where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(b)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(6) That, for the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Reno, Nevada, on this 7 day of May, 1998.
_____/s/_________________________
Michael R. Fitzsimonds, Chief Executive Officer & Director
_____/s/_________________________
Dennis J. McDowell, Chief Financial Officer & Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated. Each Officer and Director may execute a separate signature page
and when all of the separate pages are put together, they shall be construed as
one signature page as if all of the Officers and Directors had signed on one
page.
Dated: May 7, 1998
_____/s/____________________________
Michael R. Fitzsimonds, Director
_____/s/____________________________
Daniel T. Taylor, Director
_____/s/____________________________
Donald J. McDowell, Director
_____/s/____________________________
Dennis J. McDowell, Director
_____/s/____________________________
David A. Caldwell, Director
NO SEAL:
<PAGE>
PROSPECTUS
400,000 Shares
GOLDEN PHOENIX MINERALS, INC.
The 400,000 shares of Golden Phoenix Minerals, Inc., a Minnesota
corporation (Golden or the Company) may be offered for sale from time to time by
and for the account of certain stockholders of the Company (the Selling
Shareholders). The Selling Shareholders acquired the shares in exchange for
mining property. The Company will not receive any of the proceeds from the sale
of the shares by the Selling Shareholders.
The common stock of the Company is listed on the OTC Bulletin Board,
and on May 5, 1998 the last reported sales price was $.50 per share.
The Selling Shareholders, or their transferees, from time to time
may offer and sell the shares directly or through agents or broker-dealers on
terms to be determined at the time of sale. To the extent required, the names of
any agents or broker-dealers, and applicable commissions or discounts and any
other required information with respect to any particular offer, will be set
forth in an accompanying Prospectus Supplement. See Plan of Distribution.
The Selling Shareholders and any agents or broker-dealers that
participate in the distribution of the shares may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended (the Securities
Act), and, in such event, any commissions received by them and any profit on the
resale of the shares may be deemed to be underwriting commissions or discounts
under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 6, 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance with the Act files reports,
and other information with the Securities and Exchange Commission (the
Commission). Such reports, and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street N.W., Washington, D.C. 20549, and the
Commission's Regional offices at 75 Park Place, 14th Floor, New York, New York
100007; 5757 Wilshire Boulevard, Suite 500 East, Los Angeles, California 90036
and 500 West Madison, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from such facilities and the Public Reference Section
of the Commission at 450 Fifth Street, N.W. Washington, D.C. 20549 at prescribed
rates.
This Prospectus, which constitutes part of a registration statement
filed by the Company with the Commission under the Securities Act of 1933 omits
certain of the information contained in the registration statement. Reference is
hereby made to the registration statement and to the exhibits relating thereto
for further information with respect to the Company and the shares offered.
Statements contained concerning the provisions of documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the registration statement or otherwise filed with the
Commission. Each statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Company are incorporated by reference into this Prospectus:
(1) The Company's annual report on Form 10-KSB for the fiscal year
ended December 31, 1997;
(2) All other documents filed by the Registrant shall be deemed
incorporated by reference.
The Company will provide, without charge, to each person to whom a
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference (not including
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents). Requests for copies or such documents should be
directed to the Company, 527 Marquette, Suite 1800, Minneapolis, Minnesota
55402.
<PAGE>
THE COMPANY
Golden Phoenix Minerals, Inc. (the "Company") was formed in
Minnesota on June 2, 1997 and has had limited operations.
The Company plans to produce economically valuable minerals from the
mineral properties it currently controls, and from mineral properties that it
will acquire in the future. The Company intends to concentrate its exploration
efforts in the Western United States and Alaska.
The Company's corporate directors, officers and technical support
team is comprised of 8 former senior management, geological exploration and
development staff members from Santa Fe Pacific Gold Corp. (SFPG) and one senior
exploration manager from Rio Tinto (RTZ/Kennecott). This experienced and diverse
team has in excess of 100 years of major corporate mineral exploration,
development and gold production experience.
Golden Phoenix's key employees were actively involved in the
exploration, discovery and development activities of SFPG, which was the sixth
largest gold producer in North America before it was purchased by Newmont Gold,
North America's largest gold producer, for $2.2 billion. SFPG discovered and
developed over 28 million ounces of gold reserves with annual production in
excess of 800,000 ounces.
The Company will provide joint venture opportunities to other
selected mining companies, to conduct exploration or development on mineral
properties the Company owns or controls. The Company and its joint venture
partners will explore and develop selected properties to a stage of proven and
probable reserves, at which time the Company will then decide whether to sell
its interest in a property or take the property into production with its joint
venture partner. By joint venturing its properties and thereby reducing its
share of the costs for exploration of those properties, the Company can
maintain, while continuing to acquire, an interest in a portfolio of gold and
base metals properties in various stages of mineral exploration and development.
This corporate strategy will minimize financial risk that the Company would
incur by assuming all the exploration costs associated with developing any one
property, while maximizing the potential of success and growth.
The Company believes that it can create the basis for a competitive
minerals exploration company through assembling a unique group of individuals
with experience in target generation and discovery, resource evaluation and mine
development. The technical team that the Company has assembled consists of two
geological engineers with 42 years of combined experience in the economic
evaluation of mining properties, three geologists with 54 years of combined
experience in mineral exploration, one professional land surveyor who is also an
explorationist with 19 years experience, and one landman/lawyer with 15 years
experience in the minerals industry.
There are at least five sources of land for exploration by the
Company: public
<PAGE>
lands, private fee lands, aboriginal tribal lands, unpatented mining claims, and
patented mining claims. The primary sources for acquisition of these lands are
the United States government, through the Bureau of Land Management and the U.
S. Forest Service, state governments, tribal governments, and individuals or
entities who currently hold title to or lease government and private lands.
There are numerous levels of government regulation associated with
the activities of exploration and mining companies. The only two types of
permitting which the Company should have to be concerned with in the near future
are "Notice of Intent" and "Plan of Operations". Both types of procedures will
be necessary in the next twelve months. The Company has not yet filed for any of
these permits and cannot guarantee that the regulatory agency will in a timely
manner approve, if at all, the necessary permits. Further, it will be necessary
to obtain or post a bond for the reclamation of the proposed surface
disturbance.
The total cost and effects on the Company's operations of the
permitting and bonding process cannot be estimated at this time. The cost will
vary for each project when it is initiated.
JOINT VENTURES
The company has signed an acquisition agreement ("Welsh Agreement")
with J. D. Welsh & Associates ("Welsh") to acquire 100 percent of Welsh's 30
percent interest in the Borealis Mine project in Mineral County, Nevada. The
Company has initially paid Welsh US$250,000 and 50,000 shares of its common
stock (valued at US$2.10) for an initial 25 percent ownership in Welsh's 30
percent participating interest in the Borealis Mine project. The Company can
purchase Welsh's entire interest by completing scheduled payments totaling an
additional US$1.25 Million over the next 3 years. The Company is carried through
positive feasibility after the completion of the Welsh payments. Cambior
Exploration USA, Inc. ("Cambior USA") currently has a 70 percent interest in the
project subject to spending US$7Million over the next 7 years. Cambior is the
operator of the Borealis Mine project. If Cambior fails to make its required
work commitment then the property will revert to 100 percent ownership and
operation by the Company.
An agreement to acquire the property called High-Grade has been
entered into with Kennecott Exploration Company ("Kennecott"), a subsidiary of
Rio Tinto Plc., and will allow the Company to earn-in a 100 percent interest in
the property. Kennecott Exploration has retained a buy-back option at the time a
positive feasibility study is completed. Should Kennecott exercise that option,
they would become mine operator and reimburse the Company 150 percent of 51
percent of its exploration expenditures to enter into a 51 percent-49 percent
joint mining venture; if not, Kennecott would reduce to a 2 percent net smelter
return royalty. The Company has agreed to make a US$1Million work commitment
over 3 years and a cash or stock payment of US$200,000. No other payments are
required, except the underlying property owner is entitled to a payment of
$25,000 on July 15, 1999 and then a payment of $50,000 on each July 15th
thereafter during the term of the lease. The Underlying property owner also
reserved a 5 per cent royalty which may be bought out for $500,000 for each 0.5
percent of the royalty (total buyout $5 million).
<PAGE>
FUNDING
The Company plans to finance its operations through the exercising
of common stock options controlled by key directors of the Company. As part of
the formation of the Company, the Board of Directors resolved to create two
million options with one million at US$2.00 and one million at US$3.00. These
were created respectively in the names of Michael R. Fitzsimonds, president, and
Donald J. McDowell, executive vice president, for the purpose of raising
additional financing as the company needed operating capital for its exploration
and development activities. The Company will also offset some of its cost by
joint-venturing its properties with other mining groups for exploration and
development while paying fees to Golden Phoenix Minerals, Inc. for the right to
acquire an interest in the property.
COMPETITION
Over the last five years the imposition of claim rental fee policies
by the United States Government and the general exodus of major gold
corporations from the U.S. to pursue mineral exploration in foreign countries
has opened prospective mineral ground for location and acquisition. Recently,
however, mining claim staking by the major mining companies on public lands has
increased and may be signaling a more competitive environment for the Company in
the future.
SEASONAL EFFECTS
The Company has positioned itself to handle any seasonal aspect of
the exploration business by locating properties in differing climatic zones,
thus allowing field work on a near year-round basis. Problems of access and
inclement weather will be minimized through strategic planning of fieldwork.
CAPITAL EQUIPMENT
The only capital equipment the Company plans to purchase in the next
twelve months will be field vehicles and computer equipment. The field vehicles
will be for staff professionals only, all contractors will provide their own
vehicles. The computer equipment will aid in the analysis of geologic data and
in the preparation of reports for shareholders. The Company will be able to
evaluate and make decisions on the economic viability of a mineral property more
efficiently with the appropriate computer equipment and software.
STAFFING
The Company has expanded its staffing level with three professionals
to cover land issues, resource evaluation and project evaluation during the last
three months of 1997. The Company does not anticipate adding any further
permanent staff in the next twelve months of operation. The Company will employ
independent contractors to fulfill short-term needs and obligations.
ENVIRONMENTAL CONTROLS
The Company is required to comply with numerous environmental laws
and regulations imposed by federal and state authorities. At the federal level,
legislation
<PAGE>
such as the Clean Water Act, the Clean Air Act, the RCRA, CERCLA and the
National Environmental Policy Act impose effluent and waste standards,
performance standards, air quality and emissions standards and other design or
operational requirements for various components of mining and mineral
processing, including gold ore mining and processing. In 1997, the BLM amended
its surface management regulations to require bonding of all hardrock and
exploration operations greater than casual use. Until the EPA formally proposes
the new regulatory program, there is not a sufficient basis on which to predict
the potential impacts of such regulations on the Company.
Many states, including the State of Nevada (where a majority of the
Company's properties are located), have also adopted regulations that establish
design, operation, monitoring, and closing requirements for mining operations.
Under these regulations, mining companies are required to provide a reclamation
plan and financial assurance to insure that the reclamation plan is implemented
upon completion of mining operations. Additionally, Nevada and other states
require mining operations to obtain and comply with environmental permits,
including permits regarding air emissions and the protection of surface water
and groundwater.
The Company's compliance with federal and state environmental laws
may necessitate significant capital outlays or delays, may materially and
adversely affect the economics of a given property, or may cause material
changes or delays in the Company's intended exploration, development and
production activities. Further, new or different environmental standards imposed
by governmental authorities in the future could adversely affect the Company's
business activities.
PROPOSED LEGISLATION AFFECTING THE MINING INDUSTRY
During the past several years, the United States Congress considered
a number of proposed amendments to the General Mining Law of 1872, as amended
(the "General Mining Law") which governs mining claims and related activities on
federal lands. In 1992, a holding fee of US$100 per claim was imposed upon
unpatented mining claims located on federal lands. Beginning in October 1994, a
moratorium on processing of new patent applications was approved. In addition, a
variety of legislation is now pending before the United States Congress to amend
further the General Mining Law. The proposed legislation would, among other
things, change the current patenting procedures, limit the rights obtained in a
patent, impose royalties on unpatented claims, and enact new reclamation,
environmental controls and restoration requirements. The royalty proposal ranges
from a two percent royalty on "net profits" from mining claims to an eight
percent royalty on modified gross income/net smelter returns. The extent of any
such changes that may be enacted is not presently known, and the potential
impact on the Company as a result of future congressional action is difficult to
predict. If enacted, the proposed legislation could adversely affect the
economics of development of operating mines on the federal unpatented mining
claims held by the Company because many of the Company's properties consist of
unpatented mining claims on federal lands. The Company's financial performance
could therefore be materially
<PAGE>
and adversely affected by passage of all or pertinent parts of the proposed
legislation.
UNCERTAINTY OF DEVELOPMENT AND PROPERTY ECONOMICS
Exploration for and production of minerals is highly speculative and
involves greater risks than are inherent in many other industries. Many
exploration programs do not result in the discovery of mineralization, and any
mineralization discovered may not be of sufficient quantity or quality to be
profitably mined. Also, because of the uncertainties in determining
metallurgical amenability of any minerals discovered, the mere discovery of
mineralization may not warrant the mining of the minerals on the basis of
available technology.
The Company's decision, as to whether any of the mineral properties
it now holds or which it may acquire in the future contain commercially minable
deposits, and whether such properties should be brought into production, depends
upon the results of its exploration programs and/or feasibility analyses and the
recommendations of engineers and geologists. The decision will involve the
consideration and evaluation of a number of significant factors, including, but
not limited to, the: (i) receipt of government permits; (ii) costs of bringing
the property into production, including exploration and development work,
preparation of feasibility studies and construction of production facilities
costs; (iii) availability and costs of financing; (iv) ongoing costs of
production; (v) market prices for the metals to be produced; and (vi) estimates
of reserves or mineralization. No assurance can be given that any of the
properties the Company owns, leases or acquires contain (or will contain)
commercially minable mineral deposits, and no assurance can be given that the
Company will ever generate a positive cash flow from production operations on
such properties.
UNCERTAINTY OF TITLE
A majority of the Company's properties consist of unpatented mining
claims, which the Company owns or leases. These claims are located on federal
land or involve mineral rights that are subject to the claims procedures
established by the General Mining Law. Under this law, if a claimant complies
with the statute and the regulations for the location of a mining claim or mill
site claim, the claimant obtains a valid possessory right to the land or the
minerals contained therein. To preserve an otherwise valid claim, the claimant
must also make certain additional filings with the county in which the land or
mineral is situated and with the Bureau of Land Management and pay an annual
holding fee of US$100 per claim. If a claimant fails to make the annual holding
payment or make the required filings, the mining claim is void or voidable.
Because mining claims are self-initiated and self-maintained rights,
they are subject to unique vulnerabilities not associated with other types of
property interests. It is difficult to ascertain the validity of unpatented
mining claims from public property records and, therefore, it is difficult to
confirm that a claimant has followed all of the requisite steps for the
initiation and maintenance of a claim. The General Mining Law requires the
discovery of a valuable mineral on each mining claim in order for such claim to
be valid, and mining claims may be challenged by
<PAGE>
rival mining claimants and the United States. Under judicial interpretations of
the rule of discovery, the mining claimant has the burden of proving that the
mineral found is of such quality and quantity as to justify further development,
and that the deposit is of such value that it can be mined, removed and disposed
of at a profit. The burden of showing that there is a present profitable market
applies not only to the time when the claim was located, but also to the time
when such claim's validity is challenged. It is therefore conceivable that,
during times of falling metal prices, claims that were valid when they were
located could become invalid if challenged.
Title to unpatented claims and other mining properties in the
western United States typically involves certain other inherent risks due to the
frequently ambiguous conveyance history of those properties, as well as the
frequently ambiguous or imprecise language of mining leases, agreements and
royalty obligations. No generally applicable title insurance is available for
mining. As a result, some of the titles to the Company's properties may be
subject to challenge.
MINING RISKS AND INSURANCE
The Company's operations are subject to all of the operating hazards
and risks normally incident to exploring for and developing mineral properties,
such as unusual or unexpected geological formations, environmental pollution,
personal injuries, flooding, cave-ins, changes in technology or mining
techniques, periodic interruptions because of inclement weather and industrial
accidents. Although the Company currently maintains insurance within ranges of
coverage consistent with industry practice to ameliorate some of these risks, no
assurance can be given that such insurance will continue to be available at
economically feasible rates, or that the Company's insurance is adequate to
cover the risks and potential liabilities associated with exploring, owning and
operating its properties. Insurance against environmental risks is not generally
available to the Company or to other companies in the mining industry.
UNKNOWN ENVIRONMENTAL LIABILITIES FOR PAST ACTIVITIES
Mining operations involve a potential risk of releases to soil,
surface water and groundwater of metals, chemicals, fuels, liquids having acidic
properties and other contaminants. In recent years, regulatory requirements and
improved technology have significantly reduced those risks. However, those risks
have not been eliminated, and the risk of environmental contamination from
present and past mining activities exists for mining companies. Companies may be
liable for environmental contamination and natural resource damages relating to
properties, which they currently own or operate or at which environmental
contamination occurred while or before they owned or operated the properties.
However, no assurance can be given that potential liabilities for such
contamination or damages caused by past activities at these properties do not
exist.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the services of certain key executives,
including Michael R. Fitzsimonds, President and Chairman of the Board of
<PAGE>
Directors; Donald J. McDowell, Executive Vice President; and Daniel T. Taylor
Vice President of Exploration. The loss of any of these individuals could have a
material adverse effect on the Company's business and operations. The Company
currently does not have key person insurance on these individuals.
RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS
The Company periodically considers the acquisition of mining claims,
properties and businesses. In connection with any such future acquisitions, the
Company may incur indebtedness or issue equity securities, resulting in dilution
of the percentage ownership of existing stockholders. The Company intends to
seek stockholder approval for any such acquisitions only to the extent required
by applicable law, regulations or stock market listing rules.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
the shares. All of the proceeds from the sale of the shares will be received by
the Selling Shareholders.
SELLING SHAREHOLDERS
The following table provides the names and number of shares of
common stock owned by each Selling Shareholder. Since the Selling Shareholder
may sell all, some or none of their shares, no estimate can be made of the
aggregate number of shares that are to be offered or that will be owned by each
Selling Shareholder upon completion of the offering to which this Prospectus
relates.
The shares offered by this Prospectus may be offered from time to
time by the Selling Shareholders named below:
Shares of
Selling Shareholders Common Stock
-------------------- ------------
J. D. Welsh & Associates 400,000
Total 400,000
The shares of J. D. Welsh & Associates are 2.8% of the total shares outstanding.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that the shares
may be sold from time to time by the Selling Shareholders, or their transferees,
on the OTC Bulletin Board or any national securities exchange or automated
interdealer
<PAGE>
quotation system on which the shares of common stock are then listed, or through
negotiated transactions or otherwise. The shares will not be sold in an
underwritten public offering. The shares will be sold at prices and on terms
then prevailing, at prices related to the then-current market price, or at
negotiated prices. The Selling Shareholders may effect sales of the shares
directly or by or through agents, broker or dealers, and the shares may be sold
by one or more of the following methods: (a) ordinary brokerage transactions,
(b) purchases by a broker-dealer as principal and resale by such broker-dealer
for its own account pursuant to this Prospectus, and (c) in "block" sales. At
the time a particular offer is made, a Prospectus Supplement, if required, will
be distributed that sets forth the name or names of agents or broker-dealers,
any commissions and other terms constituting compensation and any other required
information. In effecting sales, broker-dealers engaged by any Selling
Shareholder and/or the purchaser of the shares may arrange for other
broker-dealers to participate. Broker-dealers will receive commissions,
concessions or discounts from the Selling Shareholder and/or the purchasers of
the shares in amounts to be negotiated prior to the sale. Sales will be made
only through broker-dealers registered as such in a subject jurisdiction or in
transactions exempt from such regulation.
The Company shall comply with the requirements of Rule 144(c) under
the Securities Act, as the rule may be amended from time to time (or any similar
rule or regulation adopted by the Securities and Exchange Commission), regarding
the availability of current public information to the extent required to enable
the Selling Shareholders to sell shares without registration under the
Securities Act pursuant to Rule 144 (or any similar rule or regulation).
In offering the shares covered by this Prospectus the Selling
Shareholders and any broker, dealers or agents who participate in a sale of the
shares by the Selling Shareholders may be considered "underwriters" within the
meaning of Section 2(11) of the Securities Act, and the compensation of any
broker dealers may be deemed to be underwriting discounts and commissions.
The Company has filed this Registration Statement, of which this
Prospectus is a part, with respect to the sale of the shares and has agreed to
use its best efforts to keep the Registration Statement current and effective
for a period commencing on the effective date of the Registration Statement and
terminating twenty four months after the effective date.
The Company will not receive any of the proceeds from the sale of
the shares by the Selling Shareholders.
LEGAL MATTERS
The legality of the shares will be passed upon for the Company by
Charles Clayton, Minneapolis, Minnesota.
<PAGE>
EXPERTS
The financial statements of Golden Phoenix Minerals, Inc. appearing
in the Company's Form 10-KSB dated December 31, 1997 were audited by Gary A.
LaPalme independent auditors, as set forth in their report thereon, included
therein and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
EXHIBIT 5
[CHARLES CLAYTON LETTERHEAD]
May 13, 1998
Golden Phoenix Minerals, Inc.
3595 Airway Drive
Reno, Nevada
Gentlemen:
I have acted as counsel for the company in connection with the
preparation of the Registration Statement, and, based on this, I am of the
opinion that:
1. The company is a corporation, duly organized, validly existing,
and in good standing under the laws of the State of Minnesota, with corporate
authority to conduct the business in which it is now engaged, and as described
in the Registration Statement.
2. The shares have been duly authorized, and, when issued and
delivered against payment, will be validly issued, fully paid and nonassessable
and free from preemptive rights, will be without cumulative voting rights and
will conform to the description in the Prospectus.
3. There is not pending, or to the knowledge of counsel, threatened,
any action, suit, or proceeding before or by any court or governmental agency or
body to which the company is a party, or to which any property of the company is
subject, and which, in the opinion of counsel, could result in a material
adverse change in the business, business prospects, financial position or
results of operations, present or prospective, of the company or of its
properties or assets.
I consent that this opinion be filed as an exhibit to the
registration statement, and to the use of my name in the registration statement
under the caption "Legal Matters."
Cordially,
/s/ Charles Clayton
Charles Clayton
EXHIBIT 23
[GARY A. LaPALME, C.P.A. LETTERHEAD]
May 12, 1998
To: Whom it May Concern:
Re: Golden Phoenix Minerals, Inc.
I consent to the use of my name in connection with the audit of Golden Phoenix
Minerals, Inc. for the year ended December 31, 1997.
Thank you.
/s/ Gary A. LaPalme
Gary A. LaPalme, C.P.A.
Certified Public Accountant
