Quarterly Report (10-q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission File No. 000-22905

GOLDEN PHOENIX MINERALS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		41-1878178
(State or Other Jurisdiction Of Incorporation or Organization)		(I.R.S. Employer Identification Number)

125 East Main St., Suite 602, American Fork, UT		84003
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (801) 418-9378

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-3 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes ¨ No x

As of November 14, 2014 there were 456,773,907 outstanding shares of the registrant’s common stock.

GOLDEN PHOENIX MINERALS, INC.

FORM 10-Q INDEX

QUARTER ENDED SEPTEMBER 30, 2014

	Page Number

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013	3

Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2014 and 2013 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013 (Unaudited)	5

Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3. Quantitative and Qualitative Disclosures About Market Risk	29

Item 4. Controls and Procedures	29

PART II – OTHER INFORMATION

Item 1. Legal Proceedings	30

Item 1A. Risk Factors	30

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3. Defaults Upon Senior Securities	30

Item 4. Mine Safety Disclosures	31

Item 5. Other Information	31

Item 6. Exhibits	31

Signature Page	32

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDEN PHOENIX MINERALS, INC.

Condensed Consolidated Balance Sheets

	September 30, 2014			December 31,
	(Unaudited)			2013
ASSETS

Current assets:
Cash	$	939,144		$	4,925
Prepaid expenses and other current assets		210,460			2,515
Marketable securities		-			-
Total current assets		1,149,604			7,440

Property and equipment, net (substantially all held for sale)		304			988

Debt issuance costs		-			4,719

	$	1,149,908		$	13,147

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	651,252		$	1,480,154
Accrued liabilities		337,835			493,337
Accrued interest payable		18,487			108,738
Notes payable		1,353,223			1,561,124
Amounts due to related party		30,066			115,066
Deposits		-			31,000
Derivative liability		-			136,765
Total current liabilities		2,390,863			3,926,184

Commitments and contingencies

Stockholders’ deficit:
Preferred stock, no par value, 50,000,000 shares authorized, none issued		-			-
Common stock; $0.001 par value, 800,000,000 shares authorized, 456,773,907 and 401,082,293 shares issued and outstanding, respectively		456,774			401,082
Additional paid-in capital		58,761,953			58,398,611
Treasury stock, 415,392 shares at cost		(49,008	)		(49,008	)
Accumulated deficit		(60,410,674	)		(62,663,722	)
Total stockholders’ deficit		(1,240,955	)		(3,913,037	)

	$	1,149,908		$	13,147

See accompanying notes to condensed consolidated financial statements

GOLDEN PHOENIX MINERALS, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013

Revenues	$	-		$	-		$	-		$	-

Operating costs and expenses:
Exploration and evaluation expenses		56,287			17,240			173,853			139,540
General and administrative expenses		141,971			103,741			418,510			407,876
Depreciation and amortization expense		228			449			684			5,160

Total operating costs and expenses		198,486			121,430			593,047			552,576

Loss from operations		(198,486	)		(121,430	)		(593,047	)		(552,576	)

Other income (expense):
Interest and other income		270			-			481			48
Interest expense		(650	)		(27,607	)		(45,932	)		(45,015	)
Gain (loss) on derivative liability		-			35,251			(445,881	)		(22,043	)
Foreign currency gain (loss)		10,327			(2,533	)		11,134			9,602
Gain (loss) on disposition of assets		-			(58,009	)		2,509,885			(58,009	)
Gain on extinguishment of debt		300			-			816,408			35,039

Total other income (expense)		10,247			(52,898	)		2,846,095			(80,378	)

Income (loss) before income taxes		(188,239	)		(174,328	)		2,253,048			(632,954	)
Provision for income taxes		-			-			-			-

Net income (loss)	$	(188,239	)	$	(174,328	)	$	2,253,048		$	(632,954	)

Income (loss) per common share:
Basic	$	(0.00	)	$	(0.00	)	$	0.01		$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)	$	0.01		$	(0.00	)

Weighted average number of common shares outstanding:
Basic		456,358,515			391,262,218			447,330,672			381,042,725
Diluted		456,358,515			391,262,218			451,384,726			381,042,725

See accompanying notes to condensed consolidated financial statements

GOLDEN PHOENIX MINERALS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities:
Net income (loss)	$	2,253,048		$	(632,954	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization expense		684			5,160
Stock-based compensation		-			2,283
Common stock issued for exploration and evaluation expenses		35,300			-
Common stock issued for services		5,250			-
Amortization of debt issuance costs to interest expense		4,719			1,719
Amortization of debt discount to interest expense		12,626			22,950
Loss on derivative liability		445,881			22,043
(Gain) loss on disposition of assets		(2,509,885	)		58,009
Gain on extinguishment of debt		(816,408	)		(35,039	)
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses and other current assets		(207,945	)		7,175
Increase (decrease) in accounts payable		(504,554	)		55,300
Increase (decrease) in accrued liabilities		(129,307	)		137,915

Net cash used in operating activities		(1,410,591	)		(355,439	)

Cash flows from investing activities:
Proceeds from the disposition of assets, net of fees and costs		2,478,885			8,000

Net cash provided by investing activities		2,478,885			8,000

Cash flows from financing activities:
Proceeds from the issuance of common stock		10,000			-
Proceeds from the issuance of debt		-			75,000
Payment of debt issuance costs		-			(6,000	)
Payments of notes payable		(59,075	)		(5,595	)
Payment of amounts due to related party		(85,000	)		-

Net cash provided by (used in) financing activities		(134,075	)		63,405

Net increase (decrease) in cash		934,219			(284,034	)
Cash, beginning of the period		4,925			287,704

Cash, end of the period	$	939,144		$	3,670

See accompanying notes to condensed consolidated financial statements

GOLDEN PHOENIX MINERALS, INC.

Notes to Condensed Consolidated Financial Statements

Nine Months Ended September 30, 2014

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF FINANCIAL STATEMENT PRESENTATION

Golden Phoenix Minerals, Inc. (the “Company” or “Golden Phoenix”) is a mineral exploration and development company engaged in acquiring mineral properties with potential production and future growth through exploration discoveries. Pending requisite funding, our current growth strategy is focused on the expansion of our operations through the development of mineral properties into joint ventures or royalty mining projects. Our current efforts are focused on our properties in Nevada.

The Company was formed in Minnesota on June 2, 1997. On May 30, 2008, the Company reincorporated in Nevada.

The accompanying condensed consolidated financial statements include the accounts of the Company and of Ra Minerals, Inc. (“Ra Minerals”), a wholly owned subsidiary. All intercompany accounts and balances have been eliminated in consolidation.

The interim financial information of the Company as of September 30, 2014 and for the three months and nine months ended September 30, 2014 and 2013 is unaudited, and the balance sheet as of December 31, 2013 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense notes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months and nine months ended September 30, 2014 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Certain amounts in the condensed consolidated financial statements for the three and nine months ended September 30, 2013 have been reclassified to conform to the current period presentation.

NOTE 2 – GOING CONCERN

Our condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, we have a history of operating losses since our inception in 1997, and have an accumulated deficit of $60,410,674 and a total stockholders’ deficit of $1,240,955 at September 30, 2014. We currently have no operating revenues.

We completed the sale of our 10% ownership interest in the Santa Rosa, Panama gold project for $US 2.6 million. In February 2014, we received $260,000 of the sales proceeds and received the balance of $2,340,000 on April 23, 2014, net of certain fees and taxes. This funding has helped capitalize the Company, extinguish certain liabilities and will provide working capital to commence planned exploration activities on our joint-ventured Nevada properties.

As more fully described in these Notes to Condensed Consolidated Financial Statements and elsewhere in this quarterly report, we have entered into options and agreements for the acquisition of our Nevada mineral properties. None of these mineral properties currently have proven or probable reserves. We believe we will be required to raise significant additional capital to fund our operations and to complete the acquisition of the interests in and further the exploration, evaluation and development of our existing mineral properties and other prospects. There can be no assurance that we will be successful in raising the required capital at favorable rates or at all, or that any of these mineral properties will ultimately attain a successful level of operations. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws. These factors and our negative working capital position together raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – MINERAL PROPERTIES

Our current efforts are focused on our mining properties in Nevada. Because of lack of funds and scaling back our operations, we allowed the remainder of our mineral property claims interests to lapse in 2013.

Mhakari Properties

Vanderbilt

The Vanderbilt property is within 4 miles of the town of Silver Peak, Nevada and highway 265 via Coyote Road. It is comprised of 44 claims, plus 3 patented claims and is located on the southern flank of Mineral Ridge and is within the Silver Peak Range. The Vanderbilt property is within the middle of the Walker Lane tectonic belt with the Sierra uplift to the west and the Basin and Range to the east. Phase I geologic mapping and outcrop sampling (above ground) was completed in October 2010, resulting in average grades of 2.1 g/t gold and 58.6 g/t silver. Phase II exploration program (below ground) in the old mine workings was commenced during the first quarter of 2011 to help identify drill targets, with an exploratory drill program expected to begin in the near term as funding permits.

Coyote Fault/Coyote Fault Extension

The Coyote Fault/Coyote Fault Extension claims are within nine miles of Silver Peak, Nevada and Hwy 265 via Coyote Road. They are comprised of 110 contiguous claims and are also located in the middle of the Walker Lane tectonic belt with Sierra Block uplift to the west and the Basin and Range to the east. The property is on the northern flank of Mineral Ridge and is along the eastern edge of the Silver Peak Range. Phase I geologic mapping and outcrop sampling (above ground) was completed on the Coyote Fault claim group (38 claims) in December 2010, which identified a new potential gold exploration target. Geological mapping of the Coyote Extension claim group (72 claims) is planned for the near term as funding permits.

Amended and Restated Option Agreement

On February 26, 2013, we entered into an Amended and Restated Option Agreement with Mhakari Gold (Nevada) Inc. (“Mhakari”) with respect to the Mhakari Properties, which terminated all rights and obligations under prior agreements and restated the parties’ agreement with respect to each of the Mhakari Properties.

Mhakari granted us an option to acquire up to an undivided 80% interest in the Mhakari Properties for the following consideration to be paid by us to Mhakari:

Cash payments: $25,500, payable $20,000 upon execution of the agreement and $5,500 within 60 days thereafter; $20,000 payable on the 3 month anniversary of the agreement; $15,000 on the 6 month and 9 month anniversary of the agreement; and $50,000 on the 15 month anniversary of the agreement.

Equity payments: 8,000,000 shares of our common stock upon the execution of the agreement; an additional 7,000,000 shares of our common stock on the 4 month anniversary of the agreement; and an additional 5,000,000 shares on the 12 month anniversary of the agreement.

Work commitment: $500,000 in exploration and development expenditures on the Mhakari Properties within 18 months of the date of the agreement; an additional $500,000 in exploration and development expenditures between 18 months and 30 months from the date of the agreement; with no less than $2,000,000 in exploration and development expenditures in the aggregate within 48 months from the date of the agreement. Inclusive in this work commitment, we are to earmark no less than $10,000 per contract year for 4 years to enhancing safety on the Mhakari Properties.

Upon satisfying the consideration payable under the agreement, we shall receive an 80% undivided interest in the Mhakari Properties and the parties shall enter into a joint venture to further develop the Mhakari Properties, with us retaining an 80% interest in the joint venture. In the event that we fail to satisfy the entire purchase price by completing all cash, equity and work commitment payments within the required time frames, the agreement will be deemed to have been terminated and all payments made to date will be forfeited to Mhakari with no interest earned by us in the Mhakari Properties.

As of the date of filing this report, we are current on our obligations under the Amended and Restated Option Agreement.

North Springs Properties

The North Springs Properties consist of a large, bulk-tonnage and a high-grade vein-shear hosted gold system located along the western margin of the Mineral Ridge Mining District, approximately 8 miles west of the town of Silver Peak and 3 miles west of the Mineral Ridge open pit and underground mines. This property consists of 16 unpatented lode mining claims comprised of 320 acres.

Both the North Springs Properties and the Mineral Ridge deposits are situated along a regional northwest trending, large anticline known as the Mineral Ridge Metamorphic Core Complex. This complex contains extensive high-grade gold veins (52 miles of underground workings on low-angle veins) and stacked, low angle, shear zones, which has been open pit mined in several deposits. The North Springs Properties occupies very similar geology, alteration and mineralization, geochemistry and structural setting to the Mineral Ridge deposits. Sampling to date has identified gold mineralization up to 0.8 ounces per ton from surface workings. The North Springs Properties contain several untested gold targets that include open-pit, disseminated mineralization and high-grade shear zones and feeder veins, such as those that have been mined by several mining companies at the nearby Mineral Ridge deposits. We plan exploration activities on the North Springs Properties in the near future as funding permits.

Exploration and Mining Lease with Options to Purchase Agreement

Under the terms of an Exploration and Mining Lease with Options to Purchase Agreement effective June 17, 2013 (the “North Springs Agreement”), we acquired the rights to the 16 unpatented lode mining claims comprising the North Springs Properties on BLM lands in Esmeralda County, Nevada, located near the operating Mineral Ridge gold project. As required by the North Springs Agreement, we made advance royalty payments of $5,000 cash in June 2013 and issued 1,000,000 shares of our common stock in July 2013. We are further obligated to make the following payments under the terms of the North Springs Agreement:

Date	Cash Payment		Common Share Payment

First Anniversary of Effective Date	$	10,000	1,000,000 shares
Second Anniversary of Effective Date	$	15,000	1,000,000 shares
Third Anniversary of Effective Date	$	20,000	1,000,000 shares
Fourth Anniversary of Effective Date	$	25,000	1,000,000 shares
Fifth Anniversary of Effective Date	$	30,000

Six through Tenth Anniversary of Effective Date	$	50,000
Eleventh through Fifteenth Anniversary of Effective Date	$	75,000
Sixteenth and Each Subsequent Anniversary of Effective Date	$	100,000

Subject to prior termination, the term of the North Springs Agreement shall be for a period of twenty years commencing on the effective date. The Company is obligated to pay a production royalty equal to three percent of the Net Smelter Returns (“NSR”) from the production or sale of minerals from the North Springs Properties and meet defined minimum annual work commitments ranging from $10,000 in the first year to $100,000 beginning in the fifth year and thereafter.

As of the date of filing this report, we are current on our obligations under the Amended and Restated Option Agreement.

Sale of Interest in Santa Rosa Gold Mine

We have completed the sale of our 10% ownership interest in the Santa Rosa, Panama gold project for $US 2.6 million. In February 2014, we received $260,000 of the sales proceeds and received the balance of $2,340,000 on April 23, 2014, net of certain fees and taxes. As a result, we recognized a gain on disposition of assets of $2,457,885 in the nine months ended September 30, 2014

In September 2011, the Company and its partner formed a Panamanian corporation, subsequently renamed Vera Gold Corporation (“Vera Gold”), for the purpose of developing and operating mining concessions pertaining to the Santa Rosa Gold Mine located in the Province of Veraguas, Panama. Pursuant to an agreement entered into in July 2012, the Company and its partner agreed to terminate the original agreement to develop the Santa Rosa Gold Mine, and the Company retained a 10% interest in Vera Gold. On February 12, 2014, the Company completed negotiations for a Share Purchase Agreement, whereby it sold its 10% ownership in Vera Gold to certain foreign investors for US$2.6 million.

Exploration and evaluation expenses related to our Mhakari and North Springs Properties included in our consolidated statements of operations totaled $56,287 and $17,240 for the three months ended September 30, 2014 and 2013, respectively, and $173,853 and $139,540 for the nine months ended September 30, 2014 and 2013, respectively.

NOTE 4 – MARKETABLE SECURITIES AND SALE OF ROYALTY INTEREST

Our marketable securities consisted of 1,250,000 shares of American Mining Corporation common stock (“AMC”) and the 3,000,000 shares of Win-Eldrich Mines Ltd (“WEX”) common stock received in October 2011 in the settlement of a promissory note resulting from the sale of our interest in the Ashdown Project LLC. The marketable securities were recorded at market value, with market value based on market quotes and reduced by estimated impairment losses. We classified these marketable securities as securities held-for-sale in accordance with Accounting Standards Update (“ASU”) Topic 320, Investments – Debt and Equity Securities. Unrealized gains and losses resulting from changes in market value were recorded as other comprehensive income, a component of stockholders’ equity in our consolidated balance sheet.

Pursuant to a Shares Purchase Agreement dated January 31, 2014, we sold the WEX shares for $7,000, and included this amount in gain on disposition of assets for the nine months ended September 30, 2014.

There is limited trading of the AMC shares and no market for the AMC shares has developed. After considering the lack of operations of AMC and the lack of trading volume of the shares, the number of shares held by us, and other factors, we have concluded that the recorded value of these marketable securities at September 30, 2014 and December 31, 2013 should be fully impaired and that the impairment loss is other-than-temporary.

On January 31, 2014, we sold for $45,000 our net smelter royalty return (“NSR”) interest relating to the operations conducted by or on behalf of the Ashdown Project LLC and included this amount in gain on disposition of assets for the nine months ended September 30, 2014. We acquired the NSR pursuant to the sale of our ownership interest in the Ashdown Project in May 2009 and a subsequent Termination, Settlement and Release Agreement entered into in August 2011.

NOTE 5 – ACCRUED LIABILITIES

Accrued liabilities consisted of the following at:

	September 30, 2014		December 31, 2013

Accrued payroll and related	$	17,500	$	92,643
Liabilities assumed in Ra Minerals acquisition		158,335		166,901
Put option liability		-		120,000
Legal and consulting fees		45,000		45,000
Other		117,000		68,793

	$	337,835	$	493,337

NOTE 6 – NOTES PAYABLE

Our notes payable consisted of the following at:

	September 30, 2014		December 31, 2013
Convertible notes payable to SV, non-interest bearing, payable September 30, 2012, currently in default	$	500,000	$	500,000

Convertible note payable to SV, non-interest bearing, payable September 30, 2012, currently in default		413,223		413,223

Note payable to Pinnacle, non-interest bearing, payable in scheduled monthly payments ranging from $15,000 to $30,000 through August 2012, currently in default		190,000		190,000

Convertible note payable to Pinnacle, non-interest bearing, payable October 31, 2013, currently in default		250,000		250,000

Note payable to an equipment supplier, extinguished in 2014		-		175,457

Convertible notes payable to an institutional investor, net of discount, repaid in 2014		-		32,444

	$	1,353,223	$	1,561,124

Convertible Notes Payable to Institutional Investor

On June 4, 2013, August 22, 2013, November 5, 2013, and November 15, 2013, we entered into convertible promissory notes payable to an institutional investor (“investor”) for $42,500, $32,500, $15,575, and $11,000, respectively, (“Convertible Notes”), which bore interest at an annual rate of 8% and were to mature on March 6, 2014, May 27, 2014, August 7, 2014, and August 19, 2014, respectively. The investor had the right, after the first 180 days of the notes, to convert the Convertible Notes and accrued interest in whole or in part into shares of our common stock at a price per share equal to 58% (representing a discount rate of 42%) of the average of the lowest three trading prices for our common stock during the ten trading day period ending one trading day prior to the date of the conversion notice.

At any time for the period beginning on the date of the Convertible Notes and ending on the date which is 30 days following the date of the Convertible Notes, we had the option to prepay the Convertible Notes upon payment of an amount equal to the outstanding principal multiplied by 110%, together with accrued and unpaid interest. The amount of the prepayment increased every subsequent 30 days to 115%, 120%, 125%, 130% and 135% of the outstanding principal together with accrued and unpaid interest. After the expiration of 180 days following the date of the Convertible Notes, we had no right of prepayment.

At the inception of the June 4, 2013 Convertible Note of $42,500, we recorded debt issuance costs of $3,000 and a debt discount and a derivative liability of $42,093 related to the conversion feature. In December 2013, we paid $14,815 principal and, in December 2013 and January 2014, the investor converted $27,685 principal and $1,700 accrued interest into shares of our common stock, extinguishing the obligation in full.

At the inception of the August 22, 2013 Convertible Note, we recorded debt issuance costs of $3,000, a debt discount of $32,500 and a derivative liability of $55,894 related to the conversion feature. In February 2014, we extinguished the obligation in full by payment of $32,500 principal and $1,268 in accrued interest.

At the inception of the November 5, 2013 Convertible Note, we recorded debt issuance costs of $1,500, a debt discount of $15,575 and a derivative liability of $35,765 related to the conversion feature. In February 2014, we extinguished the obligation in full by payment of $15,575 principal and $369 in accrued interest.

At the inception of the November 15, 2013 Convertible Note, we recorded debt issuance costs of $1,500, a debt discount of $11,000 and a derivative liability of $17,238 related to the conversion feature. In February 2014, we extinguished the obligation in full by payment of $11,000 principal and $236 in accrued interest.

Interest expense for the amortization of the debt discount was calculated on a straight-line basis over the life of the Convertible Notes and totaled $12,626 for the nine months ended September 30, 2014.

During the nine months ended September 30, 2014, we had the following activity in the accounts related to the Convertible Notes:

	Derivative Liability			Debt Discount			Loss on Derivative Liability			Gain on Extinguishment of Debt		Interest Expense

Balance at December 31, 2013	$	136,765		$	(42,316	)	$	-		$	-	$	-
Adjustment to derivative liability		445,881			-			(445,881	)		-		-
Amortization of debt discount to interest expense		-			12,626			-			-		(12,626	)
Repayment of debt		(582,646	)		29,690			-			503,065		-

Balance at September 30, 2014	$	-		$	-		$	(445,881	)	$	503,065	$	(12,626	)

In estimating the fair value of the derivative and calculating the adjustment to the derivative liability during the nine months ended September 30, 2014, we used the Black-Scholes pricing model with the following range of assumptions:

Risk-free interest rate	0.08 – 0.025%
Expected life in years	0.48 - 0.12
Dividend yield	0%
Expected volatility	274.75 – 376.38%

Other Notes Payable

The two convertible notes payable to Sala-Valc S.A.C., a Peruvian corporation (“SV”), resulted from an Amendment to Mining Asset Purchase and Strategic Alliance Agreement related to mineral properties in Peru.

The two notes payable to Pinnacle Minerals Corporation (“Pinnacle”) resulted from an Amendment to Membership Interest Purchase Agreement whereby we purchased Pinnacle’s membership interest in Molyco, LLC, which owns or controls portions of mineral properties in Peru. Pinnacle has initiated legal action related to these unpaid obligations (see Note 13).

The parties involved in the mineral property projects in Peru were not able to finalize the transfer agreements to be filed with Peruvian governmental authorities to affect the transfer to us of the mineral properties in Peru. We have therefore discontinued our efforts in Peru, and the ultimate disposition of the convertible notes payable to SV and the notes payable to Pinnacle is dependent on our resolution of our dispute with SV and of the legal actions discussed in Note 13. We are currently unable to predict the ultimate outcome of these matters.

NOTE 7 – AMOUNTS DUE RELATED PARTY

Amounts due to related party consists of a note due to Robert P. Martin, former Chairman of our Board of Directors, resulting from a debt settlement agreement entered into in April 2010. The repayment terms of the note were restructured as part of a consulting agreement entered into with Mr. Martin effective September 1, 2011. We made a principal payment of $85,000 in July 2014, resulting in a principal balance payable at September 30, 2014 of $30,066. At September 30, 2014 and December 31, 2013, related accrued interest payable was $18,487 and $14,413, respectively.

NOTE 8 – STOCKHOLDERS’ DEFICIT

We have 50,000,000 shares of no par value, non-voting convertible preferred stock authorized. As of September 30, 2014 and December 31, 2013, there were no shares of preferred stock outstanding.

We also have 800,000,000 shares of $0.001 par value common stock authorized.

During the nine months ended September 30, 2014, we issued a total of 55,691,614 shares of our common stock: 37,191,614 shares valued at $67,276 for conversion of debt (Note 6); 6,000,000 shares valued at $35,300 for exploration and evaluation expenses pursuant to our mineral property option agreements (Note 3); 5,000,000 shares for cash of $10,000; 6,000,000 shares valued at $21,600 for accrued liabilities; and 1,500,000 shares valued at $5,250 for contract services of officers and directors.

During the nine months ended September 30, 2013, we issued a total of 22,000,000 shares of our common stock: 6,200,000 shares valued at $116,000 to a director in accordance with a consulting agreement with him and 16,000,000 shares valued at $95,200 for exploration and evaluation expenses.

On April 21, 2014 we completed a Stock Purchase Agreement entered into on January 31, 2014 with an investor and received $10,000. The investor purchased 5,000,000 units at $0.002 per unit, with each unit comprised of one share of restricted common stock of the Company and a five-year warrant to purchase one share of common stock of the Company at an exercise price of $0.003 per share.

As of September 30, 2014 and December 31, 2013, we had 415,392 shares of our common stock acquired in a previous stock repurchase program that were recorded as treasury shares at a cost of $49,008.

NOTE 9 – STOCK WARRANTS

We have issued warrants to purchase shares of our common stock in connection with equity financing agreements and pursuant to certain consulting agreements.

A summary of the status of our stock warrants as of September 30, 2014, and changes during the nine months then ended is presented below:

				Weighted Average
	Shares			Exercise Price

Outstanding, December 31, 2013		26,750,000		$	0.06

Granted		5,150,000		$	0.0044
Canceled / Expired		(12,250,000	)	$	0.066
Exercised		-

Outstanding, vested and exercisable, September 30, 2014		19,650,000		$	0.043

The following summarizes the exercise price per share and expiration date of our outstanding warrants to purchase common stock at September 30, 2014:

Expiration Date	Price		Number

2015	$	0.05		4,000,000
2017	$	0.06		2,500,000
2017	$	0.04		4,000,000
2017	$	0.08		4,000,000
2017	$	0.05		150,000
2019	$	0.003		5,000,000

				19,650,000

During the nine months ended September 30, 2014, we issued five-year warrants to purchase 5,000,000 shares of our common stock at an exercise price of $0.003 per share (see Note 8).

During the nine months ended September 30, 2014, we issued three-year warrants to purchase 150,000 shares of our common stock at an exercise price of $0.05 per share. The warrants were issued in connection with the extinguishment of debt and were valued at $142 using the Black-Scholes option- pricing model.

NOTE 10 – STOCK-BASED COMPENSATION

We account for stock-based compensation in accordance with ASU Topic 718, Compensation – Stock Compensation. Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the estimated value of the award granted, using the Black-Scholes option pricing model, and recognized over the period in which the award vests in general and administrative expenses. We had no stock-based compensation expense for the three months and nine months ended September 30, 2014. Stock-based compensation expense for the nine months ended September 30, 2013 was $2,283.

The following table summarizes the stock option activity during the nine months ended September 30, 2014:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contract Term		Aggregate Intrinsic Value

Outstanding at December 31, 2013		5,300,000		$	0.09
Granted		-
Exercised		-
Expired or cancelled		(2,000,000	)	$	0.11

Outstanding, vested and exercisable at September 30, 2014		3,300,000		$	0.08	2.37	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on our closing stock price of $0.0034 as of September 30, 2014 which would have been received by the holders of in-the-money options had the option holders exercised their options as of that date.

As of September 30, 2014, there was no future compensation cost related to non-vested stock-based awards not yet recognized in our condensed consolidated statements of operations and comprehensive loss.

NOTE 11 – EARNINGS (LOSS) PER SHARE

The computation of basic earnings (loss) per common share is based on the weighted average number of shares outstanding during the period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the weighted average common stock equivalents which would arise from the exercise of stock options, warrants and rights outstanding using the treasury stock method and the average market price per share during the period.

The shares used in the computation of our basic and diluted earnings per share are reconciled as follows for the three months and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013

Weighted average number of shares outstanding - basic		456,358,515		391,262,218		447,330,672		381,042,725
Dilutive effect of stock options and warrants		-		-		4,054,054		-

Weighted average number of shares outstanding - diluted		456,358,515		391,262,218		451,384,726		381,042,725

At September 30, 2014, we had outstanding options and warrants to purchase a total of 22,950,000 common shares that could have a future dilutive effect on the calculation of earnings per share.

NOTE 12 – CONSULTING AGREEMENTS

Donald B. Gunn

On December 7, 2011, we entered into a Consulting Agreement (the “Gunn Consulting Agreement) with Donald Gunn, whereby Mr. Gunn is to provide services to the Company in his role as President of the Company. Mr. Gunn was appointed President of the Company effective March 15, 2011. Pursuant to the Gunn Consulting Agreement, the Company has accrued monthly compensation to Mr. Gunn of $3,000 from July through November 2011 and $6,000 from December 31, 2011 to May 2014 when monthly compensation was increased to $9,000.

Dennis P. Gauger

On January 15, 2013, the Board of Directors appointed Dennis P. Gauger as our Chief Financial Officer and Corporate Secretary. Pursuant to an Independent Contractor Agreement, Mr. Gauger was to perform the agreed upon duties for a period of one year and be paid $5,000 per month through June 2013 and $7,500 per month for the remainder of the contract. Effective September 1, 2013, Mr. Gauger’s compensation was reduced to $3,000 per month and, effective May 1, 2014, Mr. Gauger’s compensation was increased to $5,000 per month. Mr. Gauger is eligible to participate in our stock option plan as approved by the Board of Directors.

Effective May 1, 2014, the Board of Directors of the Company approved the following monthly compensation levels for members of our Interim Governing Board (“IGB”): Donald Gunn $9,000 and John Di Girolamo and Jeffrey Dahl $7,000. The three members of the IGB each also received 500,000 restricted shares of common stock of the Company. The Board also approved monthly compensation of $5,000 for Dennis Gauger, Chief Financial Officer, effective May 1, 2014.

NOTE 13 – LEGAL MATTERS

On May 22, 2013, Pinnacle Minerals Corporation, a Florida corporation (“Pinnacle”), sued the Company, seeking payments allegedly due on the two promissory notes issued in connection with a membership interest purchase agreement entered into as of March 7, 2011, relating to a Peruvian mining venture. The case was filed in the United States District Court for the District of Nevada, as “Pinnacle Minerals Corporation v. Golden Phoenix Minerals, Inc., Case number 2:13 – CV – 00915 – MMD – NJK. We filed a motion to stay the litigation and compel arbitration, pursuant to a provision of the subject purchase agreement. Based on negotiations, and agreement and stipulation between the parties, this case was dismissed on July 22, 2013. The parties have submitted the dispute to binding arbitration in Reno, Nevada. While denying the allegations of the complaint, we have also asserted counterclaims against Pinnacle and intend to vigorously defend the claims, all of which will be pursued through the arbitration proceedings. The arbitration was originally set to be heard on September 8, 2014 but has been extended to a future date to be determined.

On October 24, 2013, we filed a lawsuit in the Second Judicial District Court for the State of Nevada (Golden Phoenix Minerals, Inc. vs. David A. Caldwell, Tom Klein, et al., case number CV 13-02332) alleging breaches by the defendants of various contracts and duties owed by the defendants to the Company, together with claims for fraud and breach of contract, conspiracy and other claims, relating primarily to the facts and circumstances surrounding the transaction we entered into with Pinnacle as discussed above, and related business and financial transactions among the parties. Mr. Caldwell is a former Chief Executive Officer and former member of the Board of Directors of the Company. Mr. Klein is a former Chief Executive Officer and a former member of the Board of Directors of the Company. We subsequently entered into a settlement agreement with Mr. Klein and have removed him from this case. We intend to vigorously prosecute the case involving Mr. Caldwell to protect our legal and property rights and interests. Answers and counterclaims have been filed by the remaining defendants, alleging breach of contracts and related claims, all of which have been denied by the Company. The Company has filed an answer to the counterclaim. No discovery has commenced, and no trial date has been set. We will continue to seek to consolidate this case with the Pinnacle case, including mediation of all claims of the parties.

NOTE 14 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

During the nine months ended September 30, 2014 and 2013, we made no cash payments for income taxes.

During the nine months ended September 30, 2014 and 2013, we made cash payments for interest totaling $19,457 and $2,647, respectively.

During the nine months ended September 30, 2014, we had the following non-cash financing and investing activities:

·	Decreased accrued interest payable by $1,700, decreased notes payable by $15,685, decreased debt discount by $2,967, decreased derivative liability by $52,106, increased common stock by $37,192 and increased additional paid-in capital by $30,084 for common shares issued in conversion of debt.

·	Decreased accrued liabilities by $21,600, increased common stock by $6,000 and increased additional paid-in capital by $15,600 for common shares issued for accrued liabilities.

·	Decreased accounts payable and increased additional paid-in capital by $143 for warrants issued for accounts payable.

·	Decreased accounts payable and increased additional paid-in capital by $279,465 for related party accounts payable settled and recorded as a contribution to capital.

During the nine months ended September 30, 2013, we had the following non-cash financing and investing activities:

·	Decreased accrued liabilities by $211,201, increased common stock by $22,200 and increased additional paid-in capital by $189,001 for common shares issued in payment of accrued liabilities and exploration and evaluation expenses.

NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the financial statement distinction between development stage entities and other reporting entities from U.S. generally accepted accounting principles (“GAAP”). In addition, the amendments eliminate the requirements for development stage entities to: (1) present inception-to-date information in the statements of income, cash flows and shareholder equity; (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. The Company adopted the provisions of ASU No. 2014-10 during its third fiscal quarter ended September 30, 2014, with no impact on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 310-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has not determined the impact of the future adoption of the provisions of ASU No. 2014-15 on its consolidated financial statements.

NOTE 16 – SUBSEQUENT EVENTS

Subsequent to September 30, 2014, we paid the remaining amount due related party of $30,066 (see Note 7).

Subsequent to September 30, 2014, we participated in a private placement in Ximen Mining Corp. (“Ximen”), a Canadian publicly listed mineral exploration company, with an investment of $124,000. We purchased 450,000 units consisting of one common share and one non-transferable warrant entitling us to purchase one further common share of Ximen at an exercise price of $0.40 per warrant share for a period of two years. Ximen is focused on the exploration and development of gold projects in southern British Columbia and currently has a 100% interest in two properties: the Gold Drop Project and the Brett Gold Project.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING STATEMENTS

Except for historical information, the following Management’s Discussion and Analysis contains forward-looking statements based upon current expectations that involve certain risks and uncertainties. Such forward-looking statements include statements regarding, among other things, (a) our estimates of mineral reserves and mineralized material, (b) our growth strategies, (c) our expectations regarding property acquisitions or exploration plans, (d) anticipated trends in our industry, (e) our future financing plans, (f) our anticipated needs for working capital, (g) our lack of operational experience and (h) the benefits related to ownership of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition” as well as in this Report generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” described in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”) and matters described in this Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Report will in fact occur as projected.

OVERVIEW

We are a mineral exploration and development company, formed in Minnesota on June 2, 1997 and reincorporated in the State of Nevada in May 2008.

Our business includes acquiring mineral properties with potential production and future growth through exploration discoveries. Our current growth strategy is focused on the expansion of our operations through the development of mineral properties into joint ventures or royalty mining projects. Our current efforts are focused on our properties in Nevada.

As more fully described in the Notes to Consolidated Financial Statements and elsewhere in this annual report, we have entered into an agreement to acquire an 80% interest in the Vanderbilt Silver and Gold Project, the Coyote Fault Gold and Silver Project, and claims that are an extension to the Coyote Fault property, all located adjacent to the producing Mineral Ridge property near Silver Peak, Nevada (the “Mhakari Properties”). In addition, we entered into an agreement to acquire the rights to 16 unpatented lode mining claims on BLM lands in Esmeralda County, Nevada, also located near the Mineral Ridge property (the “North Springs Properties”).

We have contracted the professional mining services of Cardno MM&A (“Cardno”) to perform the technical evaluation of our Nevada mineral properties. We began first round evaluation on the Vanderbilt property, which we believe is a viable gold and silver exploration project. With the assistance of Cardno, we are currently permitting an exploration drilling program including up to 20 exploration drill holes using reverse circulation (“RC”). Other highlights include establishing survey control of the property’s three patent claims from 1876, contracting heavy equipment for access road improvement and drill pad construction, and establishing a strong, positive relationship with the local lead regulator office. We have also spent time evaluating the North Springs Properties, and have decided to defer future work on them.

Because of lack of funds and scaling back our operations, we allowed the remainder of our mineral property claims interests to lapse in 2013, and we have abandoned such other projects to focus on our Nevada properties, which in the opinion of management have the best potential for success.

In October 2014, we participated in a private placement in Ximen Mining Corp. (“Ximen”), a Canadian publicly listed mineral exploration company, with an investment of $124,000. We purchased 450,000 units consisting of one common share and one non-transferable warrant entitling us to purchase one further common share of Ximen at an exercise price of $0.40 per warrant share for a period of two years. Ximen is focused on the exploration and development of gold projects in southern British Columbia and currently has a 100% interest in two properties: the Gold Drop Project and the Brett Gold Project.

As funding permits, we intend to continue to strategically acquire, explore and develop mineral properties. We plan to provide joint venture opportunities for mining companies to conduct exploration or development on mineral properties we own or control. We, together with any future joint venture partners, intend to explore and develop selected properties to a stage of proven and probable reserves, at which time we would then decide whether to sell our interest in a property or take the property into production alone or with our future partner(s). By joint venturing our properties, we may be able to reduce our costs for further work on those properties, while continuing to maintain and acquire interests in a portfolio of gold and base strategic metals properties in various stages of mineral exploration and development. We expect that this corporate strategy will minimize the financial risk that we would incur by assuming all the exploration costs associated with developing any one property, while maximizing the potential for success and growth.

GOING CONCERN UNCERTAINTY

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a variety of estimates and assumptions that affect: (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013, and several of these critical accounting policies are as follows:

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are calculated using the straight-line method over estimated useful lives ranging from 3 to 7 years.

Mine development costs are capitalized after proven and probable reserves have been identified. Amortization of mine development costs will be calculated using the units-of-production method over the expected life of the operation based on the estimated proven and probable reserves. As of September 30, 2014 and December 31, 2013, we had no mineral properties with proven or probable reserves and no amortizable mine development costs.

Mineral Property Acquisition Costs

Mineral property acquisition costs are recorded at cost and capitalized where an evaluation of market conditions and other factors imply the acquisition costs are recoverable. Such factors may include the existence or indication of economically mineable reserves, a market for the subsequent sale of the mineral property, the stage of exploration and evaluation of the property, historical exploration or production data, and the geographic location of the property. Once a determination has been made that a mineral property has proven or probable reserves that can be produced profitably, depletion of the capitalized acquisition costs will be computed at the commencement of commercial production on the units-of-production basis using estimated proven and probable reserves. As of September 30, 2014 and December 31, 2013, we had no capitalized mineral property acquisition costs.

Where an evaluation of market conditions and other factors results in uncertainty as to the recoverability of exploration mineral property acquisition costs, the costs are expensed as incurred and included in exploration and evaluation expenses.

Exploration and Evaluation Expenses

Exploration expenses relating to the search for resources suitable for commercial production, including researching and analyzing historic exploration data, conducting topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching and sampling are expensed as incurred.

Evaluation expenses relating to the determination of the technical feasibility and commercial viability of a mineral resource, including determining volume and grade of deposits, examining and testing extraction methods, metallurgical or treatment processes, surveying transportation and infrastructure requirements and conducting market and finance studies are expensed as incurred.

Mineral Property Development Costs

Mineral property development costs relate to establishing access to an identified mineral reserve and other preparations for commercial production, including infrastructure development, sinking shafts and underground drifts, permanent excavations, and advance removal of overburden and waste rock.

When it is determined that commercially recoverable reserves exist and a decision is made by management to develop the mineral property, mineral property development costs are capitalized and carried forward until production begins. The capitalized mineral property development costs are then amortized using the units-of-production method using proven and probable reserves as the mineral resource is mined.

Proven and Probable Ore Reserves

We currently have no proven or probable ore reserves.

On a periodic basis, if warranted based on our property portfolio and the stage of development of each property, management would review the reserves that reflect estimates of the quantities and grades of metals at our mineral properties which management believes can be recovered and sold at prices in excess of the total cost associated with mining and processing the mineralized material. Management’s calculations of proven and probable ore reserves would be based on, along with independent consultant evaluations, in-house engineering and geological estimates using current operating costs, metals prices and demand for the metals. Periodically, management may obtain external determinations of reserves.

Closure, Reclamation and Remediation Costs

Current laws and regulations require certain closure, reclamation and remediation work to be done on mineral properties as a result of exploration, development and operating activities. We periodically review the activities performed on our mineral properties and make estimates of closure, reclamation and remediation work that will need to be performed as required by those laws and regulations and make estimates of amounts that are expected to be incurred when the closure, reclamation and remediation work is expected to be performed. Future closure, reclamation and environmental related expenditures are difficult to estimate in many circumstances due to the early stages of investigation, uncertainties associated with defining the nature and extent of environmental contamination, the uncertainties relating to specific reclamation and remediation methods and costs, application and changing of environmental laws, regulations and interpretation by regulatory authorities, the country where the project is located, and the possible participation of other potentially responsible parties.

At September 30, 2014 and December 31, 2013, we had no mining projects that had advanced to the stage where closure, reclamation and remediation costs were required to be accrued.

Property Evaluations and Impairment of Long-Lived Assets

We review and evaluate the carrying amounts of our mineral properties, capitalized mineral property development costs and related buildings and equipment, and other long-lived assets when events or changes in circumstances indicate that the carrying amount may not be recoverable. Estimated future net cash flows, on an undiscounted basis, from a property or asset are calculated using estimated recoverable minerals (considering current proven and probable reserves and mineralization expected to be classified as reserves where applicable); estimated future mineral price realization (considering historical and current prices, price trends and related factors); operating, capital and reclamation costs; , and other factors beyond proven and probable reserves such as estimated market value for the property in an arms-length sale. Reduction in the carrying value of property, plant and equipment, or other long-lived assets, with a corresponding charge to earnings, are recorded to the extent that the estimated future net cash flows are less than the carrying value.

Estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in circumstances could occur which may affect the recoverability of our properties and long-lived assets.

Debt Issuance Costs

Costs incurred with the issuance of notes payable are capitalized and amortized to interest expense through the earlier of the maturity date or repayment of the notes payable.

Derivative for Conversion Feature

We estimate the fair value of the derivative for the conversion feature of our convertible debt using the Black-Scholes pricing model at the inception of the debt and at each reporting date, recording a derivative liability, debt discount and a gain or loss on derivative liability as applicable.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in our consolidated balance sheet, where it is practicable to estimate that value. As of September 30, 2014, the amounts reported for cash, accrued liabilities, accrued interest payable, certain notes payable and amounts due to related party approximated fair value because of their short maturities.

In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” we measure certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·	Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We had no liabilities measured at fair value on a recurring basis at September 30, 2014. Liabilities measured at fair value on a recurring basis are as follows at December 31, 2013:

	Total		Level 1		Level 2		Level 3

Derivative liability	$	136,765	$	-	$	-	$	136,765
Convertible notes payable		32,444		-		-		32,444

Total liabilities measured at fair value	$	169,209	$	-	$	-	$	169,209

Revenue Recognition

Revenue from the sale of precious metals is recognized when title and risk of ownership passes to the buyer and the collection of sales proceeds is assured.

Revenue from the rental of drilling equipment is recognized when the agreed upon rental period is completed and the collection of rental proceeds is assured.

Income Taxes

We recognize a liability or asset for deferred tax consequences of all temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Deferred tax items mainly relate to net operating loss carry forwards and accrued expenses. These deferred tax assets or liabilities are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reviewed periodically for recoverability, and valuation allowances are provided when it is more likely than not that some or all of the deferred tax assets may not be realized. As of September 30, 2014 and December 31, 2013, we had fully reduced our net deferred tax assets by recording a 100% valuation allowance.

Stock-Based Compensation and Equity Transactions

In accordance with ASC Topic 718, Compensation – Stock Compensation, we measure the compensation cost of stock options and other stock-based awards issued to employees and directors pursuant to stock-based compensation plans at fair value at the grant date and recognize compensation expense over the requisite service period for awards expected to vest.

Except for transactions with employees and directors that are within the scope of ASC Topic 718, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, in accordance with ASC Topic 505-50, Equity-Based Payments to Non-Employees, we have determined that the dates used to value the transaction are either: (1) the date at which a commitment for performance by the counter party to earn the equity instruments is established; or (2) the date at which the counter party’s performance is complete.

Foreign Currency Transactions

At times, certain of our cash accounts may be deposited in a foreign bank. Gains and losses resulting from translation of such account balances are included in operating results, as are gains and losses from foreign currency transactions.

Earnings per Common Share

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during the period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the weighted average outstanding common stock equivalents which would arise from the exercise of stock options and warrants using the treasury stock method and the average market price per share during the period.

The shares used in the computation of our basic and diluted earnings per share are reconciled as follows for the three months and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013

Weighted average number of shares outstanding - basic		456,358,515		391,262,218		447,330,672		381,042,725
Dilutive effect of stock options and warrants		-		-		4,054,054		-

Weighted average number of shares outstanding - diluted		456,358,515		391,262,218		451,384,726		381,042,725

At September 30, 2014, we had outstanding options and warrants to purchase a total of 22,950,000 common shares that could have a future dilutive effect on the calculation of earnings per share.

RECENT ACCOUNTING PRONOUNCEMENTS

RESULTS OF OPERATIONS

Revenues

During the year ended December 31, 2013 we completed the sale of the equipment from our drilling division, and we had no operating revenues during the three months and nine months ended September 30, 2014 and 2013. We anticipate that we will have no more revenues from this source.

Operating Costs and Expenses

Because of our lack of funding in 2013 and into 2014, we have significantly reduced the level of our operating costs and expenses.

During the three months ended September 30, 2014 and 2013, our exploration and evaluation expenses were $56,287 and $17,240, respectively. During the nine months ended September 30, 2014 and 2013, our exploration and evaluation expenses were $173,853 and $139,540, respectively. The increase in exploration and evaluation expenses in the current year resulted from technical evaluation and other activities in process on our Nevada properties. Also included for all periods are the expenses required by the option and acquisition agreements for our Nevada properties.

Our exploration projects currently do not have proven or probable reserves. The Mhakari and North Springs Properties in Nevada are currently our only mineral properties. More detailed explanations of these mineral properties are provided in Note 3 to our condensed consolidated financial statements.

General and administrative expenses were $141,971 and $103,741 for the three months ended September 30, 2014 and 2013 and $418,510 and $407,876 for the nine months ended September 30, 2014 and 2013, respectively. These expenses include investor relations, consulting fees for our officers and accounting personnel, director fees, legal and professional fees, other outside consulting fees, travel and stock-based compensation expense. The increase in our general and administrative expenses in the current year is due primarily to increased fees paid to our directors and ongoing legal expenses.

Depreciation and amortization expense is not currently material to our consolidated financial statements and was $228 and $449 for the three months ended September 30, 2014 and 2013 and $684 and $5,160 for the nine months ended September 30, 2014 and 2013, respectively. The decrease in depreciation and amortization expense in the current year resulted from the sale and disposal of office furniture and equipment and drilling equipment in 2013.

Other Income (Expense)

Interest and other income currently are not material to our consolidated financial statements, and totaled $270 and $0 for the three months ended September 30, 2014 and 2013, and $481 and $48 for the nine months ended September 30, 2014 and 2013, respectively.

Interest expense was $650 and $27,607 for the three months ended September 30, 2014 and 2013 and $45,932 and $45,015 for the nine months ended September 30, 2014 and 2013, respectively. The decrease in interest expense in the three months ended September 30, 2014 compared to the three months ended September 30, 2013 was due primarily to the repayment in full of convertible notes payable to an institutional investor during the first three months of the current year.

We reported a loss on derivative liability of $445,881 for the nine months ended September 30, 2014 related to convertible notes payable to an institutional investor entered into in 2013. We reported a gain on derivative liability of $35,251 for the three months ended September 30, 2013 and a loss on derivative liability of $22,043 for the nine months ended September 30, 2013, respectively. We estimated the fair value of the derivative for the conversion feature of the notes at the inception of each note and at each subsequent report date or date of conversion or payment using the Black-Scholes pricing model, resulting in a gain or loss on derivative liability. As discussed above, we repaid the convertible notes payable during the first three months of the current year.

We reported a foreign currency gain of $10,327 in the three months ended September 30, 2014 and a foreign currency loss of $2,533 in the three months ended September 30, 2013. We reported a foreign currency gain of $11,134 and $9,602 in the nine months ended September 30, 2014 and 2013, respectively. The amount of the foreign currency gain or loss will fluctuate from period to period depending on the balance maintained in foreign bank accounts, our foreign investments, and changes in foreign exchange rates.

We reported a gain on disposition of assets of $2,509,885 in the nine months ended September 30, 2014, resulting from the sale of our 10% interest in in the Santa Rosa Gold Mine, net of certain fees and expenses, and from the sale of certain marketable securities and a net smelter royalty interest. We reported a loss on disposition of assets of $58,009 in the three months and nine months ended September 30, 2013.

We reported a gain on extinguishment of debt of $300 and $0 in the three months ended September 30, 2014 and 2013, and $816,108 and $35,039 in the nine months ended September 30, 2014 and 2013, respectively, resulting from the conversion of convertible debt into shares of our common stock where related derivative liabilities were extinguished. We have also had favorable results in the current year from efforts to settle outstanding obligations.

Net Income (Loss)

As a result, we reported net loss of $188,239 and $174,328 in the three months ended September 30, 2014 and 2013, respectively. We reported net income of $2,253,048 in the nine months ended September 30, 2014, compared to net loss of $632,954 in the nine months ended September 30, 2013.

LIQUIDITY AND CAPITAL RESOURCES

We have a history of operating losses since our inception in 1997, and had an accumulated deficit of $60,410,674 and a total stockholders’ deficit of $1,240,955 at September 30, 2014. At September 30, 2014, we had current assets of $1,149,604 and current liabilities of $2,390,863, resulting in a working capital deficit of $1,241,259. Included in current assets at September 30, 2014 was cash of $939,144, substantially all of which is deposited in a corporate savings account.

We have entered into options and agreements for the acquisition and development of our mineral properties that will require significant funds and require us to raise additional capital to complete the acquisitions and to fund the required exploration, evaluation and development costs and expenditures. There can be no assurance that we will be successful in raising the required capital or that any of these mineral properties will ultimately attain a successful level of operations. None of our mineral properties currently have proven or probable reserves. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws.

Because of the negative impact of disputes and litigation on our fund raising efforts, including the foreclosure and sale of our interest in the Mineral Ridge LLC and the rescission of our joint venture in Panama, and other negative market factors, we have been unable to raise the capital necessary to continue our mineral property exploration and evaluation activities and fund our operations. As a result, we significantly scaled back our mineral property acquisition and development plans and reduced the level of our operations. During 2013, we obtained only limited convertible debt financing from an institutional investor to partially fund certain general and administrative expenses. We repaid the convertible debt out of the proceeds from the initial payment from the sale of our interest in the Santa Rosa Gold Mine.

Notes Payable

We have two notes payable totaling $913,223 to Sala-Valc S.A.C., a Peruvian corporation (“SV”), resulting from an Amendment to Mining Asset Purchase and Strategic Alliance Agreement related to mineral properties in Peru.

In addition, we have two notes payable totaling $440,000 to Pinnacle Minerals Corporation (“Pinnacle”) resulting from an Amendment to Membership Interest Purchase Agreement whereby we purchased Pinnacle’s membership interest in Molyco, LLC, which owns or controls portions of mineral properties in Peru. Pinnacle has initiated legal action related to these unpaid obligations.

The parties involved in the mineral property projects in Peru were not able to finalize the transfer agreements to be filed with Peruvian governmental authorities to affect the transfer to us of the mineral properties in Peru. Therefore, we have discontinued our efforts in Peru and contend nothing further is payable by us under these promissory notes. The ultimate disposition of the convertible notes payable to SV and the notes payable to Pinnacle is dependent on the resolution of related legal actions described elsewhere in this report. We are currently unable to predict the ultimate outcome of these matters.

Net Cash Provided By or Used In Operating, Investing and Financing Activities

During the nine months ended September 30, 2014, net cash used in operating activities was $1,410,591 as a result of our net income of $2,253,048 and total non-cash expenses of $504,460, offset by total non-cash gains of $3,326,293, increase in prepaid expenses and other current assets of $207,945, and decreases in accounts payable of $504,554 and accrued liabilities of $129,307.

During the nine months ended September 30, 2013, we used net cash of $355,439 in operating activities as a result of our net loss of $632,954 and non-cash gain of $35,039, partially offset by non-cash expenses totaling $112,164, decrease in prepaid expenses and other current assets of $7,175, and increases in accounts payable of $55,300 and accrued liabilities of $137,915.

During the nine months ended September 30, 2014, we had net cash provided by investing activities of $2,478,885, consisting primarily of proceeds from the sale of our 10% ownership interest in the Santa Rosa, Panama gold project. During the nine months ended September 30, 2013, we had net cash provided by investing activities of $8,000, consisting of proceeds from the disposition of assets.

During the nine months ended September 30, 2014, net cash used in financing activities was $134,075, comprised of payments of notes payable of $59,075 and payment of amounts due to related party of $85,000, partially offset by proceeds from the issuance of common stock of $10,000.

During the nine months ended September 30, 2013, net cash provided by financing activities was $63,405, comprised of proceeds from the issuance of debt of $75,000, partially offset by payment of debt issuance costs of $6,000 and payments of notes payable of $5,595.

Off-Balance Sheet Arrangements

As of September 30, 2014, we had no material off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our principal executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2014. Based on that evaluation, our principal executive officer and chief financial officer concluded that the disclosure controls and procedures employed at the Company were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Due to lack of funding, we significantly scaled back our operations, including eliminating certain employees with accounting and administrative responsibilities. As a result, at September 30, 2014 we had insufficient segregation of accounting and financial reporting duties. We consider this to be a material weakness in our internal control over financial reporting.

Changes in Internal Control Over Financial Reporting

Other than the lack of segregation of duties described above, there was no change in our internal control over financial reporting during the fiscal quarter ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On October 24, 2013, we filed a lawsuit in the Second Judicial District Court for the State of Nevada (Golden Phoenix Minerals, Inc. vs. David A. Caldwell, Tom Klein, et al., case number CV 13-02332) alleging breaches by the defendants of various contracts and duties owed by the defendants to the Company, together with claims for fraud and breach of contract, conspiracy and other claims, relating primarily to the facts and circumstances surrounding the transaction we entered into with Pinnacle as discussed above, and related business and financial transactions among the parties. Mr. Caldwell is a former Chief Executive Officer and former member of the Board of Directors of the Company. Mr. Klein is a former Chief Executive Officer and a current member of the Board of Directors of the Company. We subsequently entered into a settlement agreement with Mr. Klein and have removed him from this case. We intend to vigorously prosecute the case involving Mr. Caldwell to protect our legal and property rights and interests. Answers and counterclaims have been filed by the remaining defendants, alleging breach of contracts and related claims, all of which have been denied by the Company. The Company has filed an answer to the counterclaim. No discovery has commenced, and no trial date has been set. We will continue to seek to consolidate this case with the Pinnacle case, including mediation of all claims of the parties.

Item 1A. Risk Factors

Not Applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

During the three months ended September 30, 2014, we had no sales of unregistered securities.

Item 3. Defaults Upon Senior Securities

Not applicable for the three months ended September 30, 2014.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

Exhibit No.	Description

3.1	Articles of Incorporation of Golden Phoenix Minerals, Inc.(1)

3.2	Bylaws of Golden Phoenix Minerals, Inc.(1)

3.3	Amended and Restated Articles of Incorporation of Golden Phoenix, Minerals, Inc.(2)

3.4	Amended and Restated Articles of Incorporation of Golden Phoenix Minerals, Inc.(3)

3.5	Certificate of Amendment to Articles of Incorporation of Golden Phoenix Minerals, Inc. (4)

3.6	Amended and Restated Bylaws of Golden Phoenix Minerals, Inc.(3)

4.1	Specimen Common Stock Certificate of Golden Phoenix Minerals, Inc.(3)

4.2	Form of Warrant of Golden Phoenix Minerals, Inc.(5)

4.3	Form of Warrant of Golden Phoenix Minerals, Inc. – Lincoln Park Capital private placement, February 29, 2012(6)

31.1	Certification of Principal Executive Officer Pursuant to Section 302.*

31.2	Certification of Chief Financial Officer Pursuant to Section 302.*

32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*

101.INS	XBRL Instance**

101.SCH	XBRL Schema**

101.CAL	XBRL Calculations**

101.DEF	XBRL Definitions**

101.LAB	XBRL Label**

101.PRE	XBRL Presentation**

*Filed herewith.

** The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section

and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

(1)	Incorporated by reference from Form 10SB12G filed with the SEC on July 30, 1997.
(2)	Incorporated by reference from Form SB-2/A filed with the SEC on June 29, 2007.
(3)	Incorporated by reference from Form 8-K filed with the SEC on June 5, 2008.
(4)	Incorporated by reference from Form 8-K filed with the SEC on December 8, 2010.
(5)	Incorporated by reference from Exhibit A to Exhibit 10.1 of Form 8-K filed with the SEC on April 25, 2007.
(6)	Incorporated by reference from Form 8-K filed with the SEC on March 7, 2012.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GOLDEN PHOENIX MINERALS, INC.

Date: November 11, 2014	By:	/s/ Donald Gunn
		Name: Donald Gunn
		Title: President and Chairman of Interim Governing Board, Principal Executive Officer

Date: November 11, 2014	By:	/s/ Dennis P. Gauger
		Name: Dennis P. Gauger
		Title: Chief Financial Officer

EXHIBIT 31.1

OFFICER’S CERTIFICATE

PURSUANT TO SECTION 302

I, Donald Gunn, certify that:

1. I have reviewed this Quarterly Report of Golden Phoenix Minerals, Inc. on Form 10-Q for the period ending September 30, 2014;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 11, 2014	By: /s/ Donald Gunn
	Donald Gunn
	President, Chairman of Interim Governing Board (Principal Executive Officer)

EXHIBIT 31.2

OFFICER’S CERTIFICATE

PURSUANT TO SECTION 302

I, Dennis P. Gauger, certify that:

1. I have reviewed this Quarterly Report of Golden Phoenix Minerals, Inc. on Form 10-Q for the period ending September 30, 2014;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 11, 2014	By: /s/ Dennis P. Gauger
	Dennis P. Gauger
	Chief Financial Officer
	(Principal Accounting and Financial Officer)

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Golden Phoenix Minerals, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Donald Gunn, Chief Executive Officer, and Dennis P. Gauger, Chief Financial Officer, on the date indicated below, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.


Date: November 11, 2014	By: /s/ Donald Gunn
	Donald Gunn
	President, Chairman of Interim Governing Board
	(Principal Executive Officer)

Date: November 11, 2014	By: /s/ Dennis P. Gauger
	Dennis P. Gauger
	Chief Financial Officer
	(Principal Accounting and Financial Officer)

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Golden Phoenix Minerals, Inc. and will be retained by Golden Phoenix Minerals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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