Waterton Becomes Scorpio Gold's Joint Venture Partner

VANCOUVER, BC - Scorpio Gold Corporation reported that an affiliate of Waterton Global Value L.P. ("Waterton"), the Company's lender and the lender to Golden Phoenix Minerals, Inc. ("Golden Phoenix"), has acquired Golden Phoenix's 30% joint venture interest in the Mineral Ridge project, located in Nevada, at a public auction that was held on April 30, 2012, following Golden Phoenix's failure to make a repayment required under its loan with Waterton.

As part of the litigation commenced by Golden Phoenix against Waterton and the Company, as disclosed in Scorpio Gold's news releases of April 4, 2012 and April 9, 2012, Golden Phoenix had applied for an injunction to prevent the completion of the Auction. After hearing the testimony of Thomas Klein, the Chief Executive Officer of Golden Phoenix, on April 24, 2012 and April 26, 2012, the judge presiding over the Proceedings found that Golden Phoenix had failed to demonstrate that there was a substantial likelihood that Golden Phoenix would prevail on the merits of its claims against Waterton and Scorpio Gold at trial and therefore denied Golden Phoenix's application for an injunction. The judge's ruling further reinforces Scorpio Gold's position that the Proceedings constitute frivolous litigation commenced by Golden Phoenix, and Scorpio Gold will look to commence a counterclaim against Golden Phoenix in order to ensure that its shareholders are compensated for any damages arising as a result.

Following the acquisition by Waterton of Golden Phoenix's interest in the Mineral Ridge project, Waterton has assumed the rights and obligations of Golden Phoenix under the operating agreement relating to the Mineral Ridge project. Scorpio Gold intends to proceed with the operation of the Mineral Ridge project on the basis set out in the 2012 Production and Operating Guidance news release disseminated by Scorpio Gold on May 1, 2012. Peter Hawley, President and Chief Executive Officer of Scorpio Gold, states: "Scorpio Gold is pleased to continue the development of the Mineral Ridge project with Waterton as its new joint venture partner. Waterton showed faith in the Mineral Ridge project at an early stage as Scorpio Gold's lender, providing the funds that enabled Scorpio Gold to bring the Mineral Ridge project into production. Scorpio Gold believes that Waterton's financial resources and experience as a lender to numerous mineral resource projects make Waterton an excellent joint venture partner in the further development of the Mineral Ridge project.